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JOB SATISFACTION TOWARDS EMPLOYEE RETENTION AMONG PRIVATE SECTOR EMPLOYEES IN SIBU, SARAWAK, MALAYSIA Sophia Wong Wang Szu RF 5549.5 J63 W872 2012 Corporate Master in Busine s Administration 2012

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Page 1: JOB SATISFACTION TOWARDS EMPLOYEE RETENTION … Satisfaction Towards Employee... · paper is designed to understand the job satisfaction towards employee retention among ... questionnaire

JOB SATISFACTION TOWARDS EMPLOYEE RETENTION AMONG PRIVATE SECTOR EMPLOYEES

IN SIBU SARAWAK MALAYSIA

Sophia Wong Wang Szu

RF 55495 J63 W872 2012

Corporate Master in Busine s Administration 2012

Pusat Khidmat MakJumat Akad~mik HNlVERSm MALAYSIA SARAWAK

PKHIDMAT MAKLUMAT AKADEMIK

1IIIIIUlrli~nlllllllll 1000246919

JOB SATISFACTION TOWARDS EMPLOYEE RETENTION AMONG PRIVATE SECTOR EMPLOYEES

IN SIBU SARA W AK MALAYSIA

f

J

SOPHIA WONG WANG SZU

J

A dissertation submitted in partial fulfillment of the requirements for the degree of Corporate Master in Business Administration

Faculty of Economics and Business UNIVERSITI MALAYSIA SARAW AK

2012

I

APPROVAL PAGE

I certified that I have supervised and read this study and in my opinion it conforms to

acceptable standards of scholarly presentation and is fully adequate in scope and quality

as a research paper for the degree of Corporate Master in Business Administration

Associate Professor Dr Lo May Chiun Supervisor

This research paper was submitted to the Faculty of Economics and Business UNIMAS

and is accepted as partial fulfillment of the requirements for the degree of Corporate

Master in Business Administration

bull

Professor Dr Shazali bin Abu Mansor Dean Faculty of Economics and Business UNIMAS

STATEl1ENT OF ORIGINALITY

The work described in this Research Paper entitled

JOB SATISFACTION TOWARDS EMPLOYEE RETENTION AMONG

PRIVATE SECTOR EMPLOYEES IN SIBU SARAWAK MALAYSIA

is to the best of the authors knowledge that of the author except

where due reference is made

Date SOPHIA WONG WANG SZU 10031730

ABSTRACT

JOB SATISFACTION TOWARDS EMPLOYEE RETENTION

AMONG PRIVATE SECTOR EMPLOYEES IN SIBU SARA WAK

MALAYSIA

By

SOPHIA WONG WANG SZU

~hiS paper is designed to understand the job satisfaction towards employee retention

among private sector employee in Sibu Sarawak Malaysia Data was collected through

questionnaire among private company in Sibu The data were analysed by using

Statistical Package for Social Science (SPSS) version 170 for Microsoft Windows The

intrinsic job satisfaction factors have been found to be able to significantly affect the

employee retention of private company in Sibu Sarawak Malaysia

ABSTRAK

KEPUASAN KERJA KE ARAH PENYIMPANAN PEKERJA DI

KALANGAN PEKERJA SEKTOR SWASTA DI SIBU SARAWAK

MALAYSIA

Oleh

SOPHIA WONG WANG SZU

Tujuan utama kertas kerja ini adalah untuk menghubungkaitkan kepuasan pekeJja dalam

kerjaya masing-masing dengan pengekalan pekerja-pekerja di sektor swasta di Sibu

Sarawak Malaysia Data telah dikumpulkan melalui soal selidik di syarikat-syarikat

swasta di Sibu Kesemua data ini dianalisis dengan menggunakan Statistical Package for

Social Science (SPSS) versi 170 untuk Microsoft Windows Faktor-faktor intrinsik bagi

kepuasan terhadap pekerjaan didapati boleh mempengaruhi pengekatan pekerja-pekerja

di syarikat swasta di Sibu Sarawak Malaysia dengan amat ketara

ACKNOWLEDGEMENTS

First I would like to express my thankfulness to my superisor Associate Professor Dr

Lo May Chiun for her continuous invaluable assistance and leading me with her

experience throughout the entire process towards the completion of this research

Besides that the support from my parents family members and friends who give and

encourage me an opportunity to continue my CMBA from financial and physical supports

Supporting from friends cannot be ignored expecially Law Lee Muan

In addition I would like to express grateful thanks for those respondents who contribute

and help for data collections

I

Pu~at Khidmat MakJumat Akad ik UNIVERSITI MALAYSIA SARA~k

TABLE OF CONTENTS

Page

List of Tables Xll

CHAPTER ONE INTRODUCTION

ll Background

111 The Malaysian Scenario 7

12 Problem Statement 9

13 Research Objectives 12

14 Research Questions 12

15 Definition of Key Terms 13

16 Significance of Study 15

17 Scope of the Study 16

18 Organization of Chapters 16

CHAPTER TWO LITERATURE REVIEW

21 Introduction 18

22 Definition of Models 18

23 Antecedents of Job Satisfaction 20

231 Work Itself 20

23 2 Recognition 21

233 Company Policies 22

234 Supervisions 23

V III

235 Salaries 24 J

2523 6 Working Conditions

24 Consequences of Job Satisfaction 26

2624 1 Employee Retention

25 The Concept of Job Satisfaction and Employee Retention 28

2825 1 Job Satisfaction

25 2 Employee Retention 29

2926 Underlying Theory

261 HerzbergS Theory 30

262 The Job Embeddedness Model (JEM) of Tumover 30

263 Empowerment Theory 31

3227 Theoretical Framework

271 Gap in the Literature 33

272 Justification of the Theoretical Framework 33

34273 Description of Variables

274 Development of Hypothesis 34

CHAPTER THREE METHODOLOGY

3731 Introduction

3732 Research Site

3733 Research Design Sample and Procedure

3833 1 Data Collection Procedure

3934 Research Questionnaire

ix

-

F

35 Measures 40

36 Pilot Study 41

37 Statistical Analyses 42

371 Descriptive Statistic 42

372 Reliability Analysis 42

373 Correlation 43

374 Regression Analysis 44

38 Summary 44

CHAPTER FOUR RESEARCH FINDINGS

41 Introduction 45

42 Demographic Profile of Respondents 45

43 Goodness of Measures 48

44 Reliability Analysis 49

45 Descriptive Statistics 50

46 Correlation Analysis - Pearson Correlations Matrix 51

47 Regression Analysis 52

48 Hypothesis Testing 53

48l IntrinsiclMotivation Factors towards E~ployee Retention 53

482 ExtrinsicHygiene Factors towards Employee Retention 53

49 Conclusion 54

x

I

CHAPTER FIVE DISCUSSION AND CONCLUSION

51 Introduction 55

52 The Backdrop 55

53 Discussion 56

531 IntrinsiclMotivation Job Satisfaction Factors in Staff Retention 57

532 ExtrinsicHygiene Job Satisfaction Factors in Staff Retention 58

54 Implications 60

55 Potential Limitations 63

56 Directions for Future Research 64

57 Conclusion 65

REFERENCES

APPENDIX

xi

LIST OF TABLES

Pages

Table 21 Employee Satisfaction Theory (Motivation amp Hygiene) 30

Table 22 Independent Variables and Dependent Variable 32

Table 31 Total Questionnaire Distributed Collected and Unretumed 38

Questionnaire

Table 32 Interpretation of the Correlation Coefficient 43

Table 41 Frequency Profile of Respondents 47

Table 42 Reliability Analysis 49

Table 43 Descriptive Statistics 50

Table 44 Correlation Analysis - Pearson Correlations Matrix 51

Table 45 Regression Analysis 52

XII

I

The above statistic demonstrated the importance of talent pool for a company

Indeed proper talent management approach especially those skilled labours are able

to contribute more than their low-skilled counterparts The MicKinsey Quarterly

claimed that knowledge workers can create more profit than others employees do shy

up to three times more and their work requires minimal oversight

Both intrinsic and extrinsic motivation factors can affect and enhance the job

satisfaction of the employees Halepota (2005) conceived motivations as a person

prescribed by the active participation and commitment to the achievement of results

Furthermore he added motivated concept is an abstract construct because different

strategies have different results at different times In other words the results may

change and varies from times to times as with only one strategy that can produce to

ensure guaranteed favourable outcome all the times

Employee job satisfaction has been explored and used to improve the talent turnover

for the firm According Hom and Kinicki (200 I) job satisfaction is a useful strategy

to prevent turnover rate for an employee The paper that analyzes the effect of job

satisfaction on labour turnover by gender in Switzerland revealed that job

satisfaction ~~ a very good predictor of future quits and that job satisfaction does not

influence the inclination to become non-employed It further added that the gender

as a factor does not affect job satisfactIOn (Sousa-Poza 2003)

2

Career development or advancement and on the job training have been proven to be

able to improve job satisfaction of the employees Theodossiou and Zangelidis (2009)

claimed that job satisfaction of individual employees in jobs with career prospects is

higher compared with those who are not Using the data from British 2004

Workplace Employee Relations Survey (WERS) Jones et aI (2008) found out that

training has positive association with job satisfaction which in tum can positively

affect the job performance

Reward is another key for staff job satisfaction The study on the effect of four

management commitments to service factors on employees job satisfaction and

service behaviours in Bangkok Thailand showed that rewards empowerment and

training are positively related to job satisfaction while organizational support does

not Moreover job satisfaction has significant impact on customer service behaviour

and cooperation (Tavitiyaman et aI 20 II)

In technical field working schedules recognition training and wage wiH determine

the staff job satisfaction Kharnnayev (2001) in the conference publication shy

retention of high tech employees revealed that technical employees demand for

flexible schedules the opportunity to gain respect and additional income by doing a

job weB and the opportunity to improve their job skills via dedicated learning If the

firm wants its employees to remain satisfied and productive it needs to deliver those

benefits in conjunction with a competitive salary

3

The quality of the service of the service industries can be influenced by employees

job satisfaction and commitment to the organisation The research on th6 influence

of organizational commitment and job satisfaction on service quality of customer-

contact employees in banking call centres (sample size 342 employees in four

telephone call centres of a major UK retail bank) showed that job satisfaction and

organizational commitment of employees can significantly affect the quality of the

service offered (Malhotra amp Mukherjee 2004)

In the teaching profession the teachers demanded for better wages working hours

and day-off related to the career The study on job satisfaction among school

teachers in Cyprus using a sample of 461 teachers and administrators (adapted

version of questionnaire Teacher 2000 Project) claimed that Cypriot teachers chose

this career due to the salary the working hours and the holidays associated with this

profession (Zembylas amp Papanastasiou 2005)

Supervision is another area that is being studied in order to improve the job

satisfaction of the employees The survey carried out on 927 respondents on the job

satisfaction in a stable child welfare workforce found out that supervision

experiencing difficulties with working conditions lack of external client resources

length of employment and being a supervisor can be the highest predictors of job

dissatisfaction (Strand amp Dore 2008)

4

Pusat Khidmat MakJumat Akademik UNlVERSm MALAYSIA SARAWAK

Although the hotel and tourism industry is flourishing the industry faced human

resource challenges The major challenges are employee retention human resource

shortages shortages of qualified managers and the expectations gap between

education and industry (Zhang amp Wu 2004) In short the difficulty of looking for a

suitable candidate for a duty makes staff turnover an urgent issue that needed to be

tackled

Researchers have been searching for the causes of staff turnover According to

Gustafson (2002) the five most cited internal causes of turnover were rate of pay

communication problems lack of advancement oppOltunities lack of recognition for

a job well done and conflict with management while the five most cited external

causes of turnover were better pay elsewhere increases of pay in other industries

low unemployment a strong local or regional economy and low quality of

employees overall

In the academic setting there are a number of factors that can affect the retention of

the academic staff Arulkumaran (1999) claimed that the economic standings

quantum of clinical work numeration retirement age facilities for research criteria

for promotion health care delivery system the financial system and the outlook of 01

the universities which operate differently in South-East Asian countries can

determine the recruitment and retention of academic staff

5

Company policy has been explored to determine its effect on staff retention

Although environmental factors such as local labour markets and individual

employee variables can affect labour turnover organizational factors (company

culture and values) and management behaviour (operational and control variables)

have significantly effect on staff retention rate in retail industry (Booth amp Hamer

2007)

The results from the decision trees using the sample data from a questionnaire survey

of 237 managers in Singapore showed that there is positive significantly association

between ethical culture constructs (top management support for ethical behaviour

and the association between ethical behaviour and career success within the

organization) and job satisfaction It also supp0l1ed that job satisfaction was

positively related to organizational commitment (Koh amp Boh 2004)

Improving employee job satisfaction and staff retention may be able to enhance

customer satisfaction In health care facilities the research on employee satisfaction

and employee retention as catalysts to patient satisfaction illustrated that focusing on

employee satisfaction and subsequently employee retention could be the catalysts to

patient satisfaction (Collins et aI 2008)

6

111 The Malaysian Scenario

As Malaysia strived to upgrade from a middle income nation to a high Income

country In order to achieve the targets of Wawasan 2020 her reliance on

productivity and irulOvation to drive economic growth has become even greater

Under the 10th Malaysia Plan talent management had been identified as the key to

succeed (Baharin et aI 201l)

Compared to working population China the Malaysians upheld different values in

workplace Although the tendency to quit is affected by the vvorkers key-degree

performance visibility off-job recompense and reward fairness in China the staff

turnover rate among Malaysians is influenced by the current management for

retaining talents job-coupling and equity of rewards that may impact the talents job

satisfaction and organizational commitment (Zheng et aI 2009)

It is difficult to find the proper talent that can carry out the duty properly in a firm

especially in the service industry The 2-Phase survey (169 human resource

managers from service companies) that investigated the gap between cooperate

needs and availability of skills and attributes among the talent pool of Malaysia

service found out that there was a gap between i~dustry needs and the availability of

important competencies within the pool of prospective workers The service industry

looked for those with competencies in communication information technology

customer relationship management and exhibited high motivation and career

7

commitment (Downe et ai 2012) This reiterated the importance of retaining the

skillful staff in a finn

Organizational justice as part of company policy is important in detennining the

Malaysian job satisfaction and tumover intention Based on the finding on the impact

of organizational justice on employees jobs satisfaction in Klang Valley Malaysia

the high level of employees perception towards faimess to means used to detennine

outcomes (procedural justice) and faimess of the outcomes employees receive

(distributive justice) can increase the level of employees job satisfaction

organizational commitment and reduce tumover intention (Choong et aI 20 II)

Another component of company policy - management is also essential in shaping the

job satisfaction among Malaysians The study on the job satisfaction level among

human resource employees in Malaysia by investigating employee relationship with

management compensation and benefits and working environment as independent

variables to job satisfaction demonstrated that the employee relationship with

management has greater influence on job satisfaction than the other variables

compensation and benefits and working environment (Teoh et ai 2011)

The role of supervision that can affect the job satisfaction in Malaysia cannot be

ignored The result from the study on the impact of mentoring and job satisfaction in

Malaysian SMEs revealed that career mentoring has positive relationship with all

dimensions of job satisfaction studies co-workers job itself promotions and

supervisors (Lo amp Ramayah 2011)

8

Furthennore the employers need to pay attention to the working condition as part of

the dimension of job satisfaction to retain their high perfonners The research that

uses Herzbergs motivation-hygiene theory and job satisfaction in Malaysia retail

sector at Bandar Sunway Shopping Mall Selangor indicated that working conditions

are the most significant in motivating sales personnel followed by recognition

company policy and salary (Tan amp Arona 2011)

12 Problem Statement

The study conducted by Aon Hewitts (2010) showed that the average overall

tumover rate (including voluntary and involuntary) for participating organizations is

157 percent for 2010 Furthennore the voluntary tumover rate for Malaysia has

increased from 101 in 2009 to 13 in 2010 It is hard to retain the workers with

the characteristic of job loyalty in non-manufacturing sectors as 75 of the

supervisor level will hops their jobs within a year stated by Goh (2012)

The Star Newspaper (Feb 19 2012) reported that in non-manufacturing sectors

some employsrs have to replace 75 of their executives who switch jobs within a

year According to Malaysian Employers Federation (MEF) executive director

Shamsuddin Bardan indicated that it cost an employer an average RM25 000 to

RM30 000 to replace each employee who quit The cost for it includes advertising

interview screening background checks training and medical check-up Hence

9

retaining an employee is a challenging task for an employer Private companies face

trouble if there is a shortage of employees to contribute to the companies

Malaysia is lagging behind in the war for talent even though our country has made

various efforts to retain and attract the talent in the country The Talent Roadmap

2020 launched by Prime Minister Datuk Seri Najib Razak has the following

objectives optimising Malaysian talent attracting and facilitating global talent and

building a network of top talent Lim (2012) a reporter from Sin Chiew Daily

mentioned that there used to be 200 talents (graduates on government scholarship)

returned and served in various government department but only one stayed after five

years

Since our nation gained independence our nation has experienced a tremendous

increase in our living standards We lead a comfortable life And the price to pay for

higher living standards will be higher cost of living The educated youngsters who

prefer to enjoy their lives are willing to spend the expenses on entertainments They

are different from their previous generations who would rather keep and save their

money to give better environment for their next generations

The Malaysian Trades Union Congress (MTUC) secretary-general Abdul Halim

Mansor pointed out that the rising cost of living could result in high turnover rate

among workers When their salaries cannot meet the cost of living they will start

hunting for a better-paying job Moreover the scenarios usually occur to semishy

10

skilled workers if compared with less skilled workers who work on the production

floor Therefore the turnover rate is increasing with the rise of the living cost

Engaging talented personnel is proven to be a difficult task for private employers

because heshe determines the survival and development of the company in this

competitive economic environment Each employee might have different need that

the employer should try to accommodate in order to prevent job hopping

In order words it is hard to establish staff loyalty as there are many intrinsic and

extrinsic factors that influence the individuals decision to leave a company such as

the personal factors job factors and benefits factors For instance culture

management level and the workforce environment of an organisation might be

another issue of influencing the turnover rate of a company

Lower emotional exhaustion more support from the school and higher job

satisfaction are needed to keep the music teachers in school The survey of 93 music

teachers from private music schools around Klang Valley in Malaysia indicated that

the support from the music schools high job satisfaction and low emotional

exhaustion apd pressure of teaching will likely prevent them from job hopping

(Wong amp Tay 2010)

A committed employee who has high job involvement and job satisfaction will less

likely to leave the firm The questionnaire survey conducted on 116 Information

Systems (IS) personnel working in multinational companies in Malaysia showed that

11

IS personnels job involvement and jobs satisfaction that are positively related to

organizational commitment have significant impact on their tendency to leave a job

(Teh amp Tritos 2011)

13 Research Objectives

The purposes of this study are to in context of employees working at Sibu to

examine the relationship between job satisfaction (intrinsicmotivation factors and

extrinsichygiene factors) towards employee retention Besides that the research

objective IS to investigate

(intrinsicmotivation factors and

retention

the

ext

relationship

rinsichygiene

between

factors)

job

towards

satisfaction

employee

14 Research Questions

The study is to address as the questions in context of employees working at Sibu

The first qu~stion is about What is the relationship the relationship between job

satisfaction and employee retention The second question is determined What is

the relationship between the extrinsichygiene factors and intrinsicmotivation factors

of job satisfaction and employee retention Lastly the question of What is the

most important factor in detennining the employee retention of the private sectors in

Sibu Sarawak Malaysia

12

15 Definition of Key Terms

Employee Engagement

Employee engagement- Kahn (1990) claim that utilize the commitment or

contribution of an employee self-governance by their putting their efforts skills and

knowledge towards their works physically cognitively and emotionally from the

start being employed in an organisation

Talent Turnover

Gustafson (2002) defined turnover as the ratio of the number of organizational

members who have left during the period being considered divided by the average

number of people in that organization during that period For managers it means the

entire process associated with filling a vacancy Turnover is also known as the

replacement cycle when a position is vacated each time either voluntarily or

involuntarily a new employee is hired and trained

Job Satisfaction

Job satisfaction is an attitude that individuals have about their jobs It results from

their perception of the degree to which there is good fit between the individual and

the organisation Ivancevich et aI s (1997 p 91) Job satisfaction is also described

as an emotional response towards various facets of ones job such as equitable pay

and working conditions (Kreitner Kinicki amp Buelens 1999)

13

Page 2: JOB SATISFACTION TOWARDS EMPLOYEE RETENTION … Satisfaction Towards Employee... · paper is designed to understand the job satisfaction towards employee retention among ... questionnaire

Pusat Khidmat MakJumat Akad~mik HNlVERSm MALAYSIA SARAWAK

PKHIDMAT MAKLUMAT AKADEMIK

1IIIIIUlrli~nlllllllll 1000246919

JOB SATISFACTION TOWARDS EMPLOYEE RETENTION AMONG PRIVATE SECTOR EMPLOYEES

IN SIBU SARA W AK MALAYSIA

f

J

SOPHIA WONG WANG SZU

J

A dissertation submitted in partial fulfillment of the requirements for the degree of Corporate Master in Business Administration

Faculty of Economics and Business UNIVERSITI MALAYSIA SARAW AK

2012

I

APPROVAL PAGE

I certified that I have supervised and read this study and in my opinion it conforms to

acceptable standards of scholarly presentation and is fully adequate in scope and quality

as a research paper for the degree of Corporate Master in Business Administration

Associate Professor Dr Lo May Chiun Supervisor

This research paper was submitted to the Faculty of Economics and Business UNIMAS

and is accepted as partial fulfillment of the requirements for the degree of Corporate

Master in Business Administration

bull

Professor Dr Shazali bin Abu Mansor Dean Faculty of Economics and Business UNIMAS

STATEl1ENT OF ORIGINALITY

The work described in this Research Paper entitled

JOB SATISFACTION TOWARDS EMPLOYEE RETENTION AMONG

PRIVATE SECTOR EMPLOYEES IN SIBU SARAWAK MALAYSIA

is to the best of the authors knowledge that of the author except

where due reference is made

Date SOPHIA WONG WANG SZU 10031730

ABSTRACT

JOB SATISFACTION TOWARDS EMPLOYEE RETENTION

AMONG PRIVATE SECTOR EMPLOYEES IN SIBU SARA WAK

MALAYSIA

By

SOPHIA WONG WANG SZU

~hiS paper is designed to understand the job satisfaction towards employee retention

among private sector employee in Sibu Sarawak Malaysia Data was collected through

questionnaire among private company in Sibu The data were analysed by using

Statistical Package for Social Science (SPSS) version 170 for Microsoft Windows The

intrinsic job satisfaction factors have been found to be able to significantly affect the

employee retention of private company in Sibu Sarawak Malaysia

ABSTRAK

KEPUASAN KERJA KE ARAH PENYIMPANAN PEKERJA DI

KALANGAN PEKERJA SEKTOR SWASTA DI SIBU SARAWAK

MALAYSIA

Oleh

SOPHIA WONG WANG SZU

Tujuan utama kertas kerja ini adalah untuk menghubungkaitkan kepuasan pekeJja dalam

kerjaya masing-masing dengan pengekalan pekerja-pekerja di sektor swasta di Sibu

Sarawak Malaysia Data telah dikumpulkan melalui soal selidik di syarikat-syarikat

swasta di Sibu Kesemua data ini dianalisis dengan menggunakan Statistical Package for

Social Science (SPSS) versi 170 untuk Microsoft Windows Faktor-faktor intrinsik bagi

kepuasan terhadap pekerjaan didapati boleh mempengaruhi pengekatan pekerja-pekerja

di syarikat swasta di Sibu Sarawak Malaysia dengan amat ketara

ACKNOWLEDGEMENTS

First I would like to express my thankfulness to my superisor Associate Professor Dr

Lo May Chiun for her continuous invaluable assistance and leading me with her

experience throughout the entire process towards the completion of this research

Besides that the support from my parents family members and friends who give and

encourage me an opportunity to continue my CMBA from financial and physical supports

Supporting from friends cannot be ignored expecially Law Lee Muan

In addition I would like to express grateful thanks for those respondents who contribute

and help for data collections

I

Pu~at Khidmat MakJumat Akad ik UNIVERSITI MALAYSIA SARA~k

TABLE OF CONTENTS

Page

List of Tables Xll

CHAPTER ONE INTRODUCTION

ll Background

111 The Malaysian Scenario 7

12 Problem Statement 9

13 Research Objectives 12

14 Research Questions 12

15 Definition of Key Terms 13

16 Significance of Study 15

17 Scope of the Study 16

18 Organization of Chapters 16

CHAPTER TWO LITERATURE REVIEW

21 Introduction 18

22 Definition of Models 18

23 Antecedents of Job Satisfaction 20

231 Work Itself 20

23 2 Recognition 21

233 Company Policies 22

234 Supervisions 23

V III

235 Salaries 24 J

2523 6 Working Conditions

24 Consequences of Job Satisfaction 26

2624 1 Employee Retention

25 The Concept of Job Satisfaction and Employee Retention 28

2825 1 Job Satisfaction

25 2 Employee Retention 29

2926 Underlying Theory

261 HerzbergS Theory 30

262 The Job Embeddedness Model (JEM) of Tumover 30

263 Empowerment Theory 31

3227 Theoretical Framework

271 Gap in the Literature 33

272 Justification of the Theoretical Framework 33

34273 Description of Variables

274 Development of Hypothesis 34

CHAPTER THREE METHODOLOGY

3731 Introduction

3732 Research Site

3733 Research Design Sample and Procedure

3833 1 Data Collection Procedure

3934 Research Questionnaire

ix

-

F

35 Measures 40

36 Pilot Study 41

37 Statistical Analyses 42

371 Descriptive Statistic 42

372 Reliability Analysis 42

373 Correlation 43

374 Regression Analysis 44

38 Summary 44

CHAPTER FOUR RESEARCH FINDINGS

41 Introduction 45

42 Demographic Profile of Respondents 45

43 Goodness of Measures 48

44 Reliability Analysis 49

45 Descriptive Statistics 50

46 Correlation Analysis - Pearson Correlations Matrix 51

47 Regression Analysis 52

48 Hypothesis Testing 53

48l IntrinsiclMotivation Factors towards E~ployee Retention 53

482 ExtrinsicHygiene Factors towards Employee Retention 53

49 Conclusion 54

x

I

CHAPTER FIVE DISCUSSION AND CONCLUSION

51 Introduction 55

52 The Backdrop 55

53 Discussion 56

531 IntrinsiclMotivation Job Satisfaction Factors in Staff Retention 57

532 ExtrinsicHygiene Job Satisfaction Factors in Staff Retention 58

54 Implications 60

55 Potential Limitations 63

56 Directions for Future Research 64

57 Conclusion 65

REFERENCES

APPENDIX

xi

LIST OF TABLES

Pages

Table 21 Employee Satisfaction Theory (Motivation amp Hygiene) 30

Table 22 Independent Variables and Dependent Variable 32

Table 31 Total Questionnaire Distributed Collected and Unretumed 38

Questionnaire

Table 32 Interpretation of the Correlation Coefficient 43

Table 41 Frequency Profile of Respondents 47

Table 42 Reliability Analysis 49

Table 43 Descriptive Statistics 50

Table 44 Correlation Analysis - Pearson Correlations Matrix 51

Table 45 Regression Analysis 52

XII

I

The above statistic demonstrated the importance of talent pool for a company

Indeed proper talent management approach especially those skilled labours are able

to contribute more than their low-skilled counterparts The MicKinsey Quarterly

claimed that knowledge workers can create more profit than others employees do shy

up to three times more and their work requires minimal oversight

Both intrinsic and extrinsic motivation factors can affect and enhance the job

satisfaction of the employees Halepota (2005) conceived motivations as a person

prescribed by the active participation and commitment to the achievement of results

Furthermore he added motivated concept is an abstract construct because different

strategies have different results at different times In other words the results may

change and varies from times to times as with only one strategy that can produce to

ensure guaranteed favourable outcome all the times

Employee job satisfaction has been explored and used to improve the talent turnover

for the firm According Hom and Kinicki (200 I) job satisfaction is a useful strategy

to prevent turnover rate for an employee The paper that analyzes the effect of job

satisfaction on labour turnover by gender in Switzerland revealed that job

satisfaction ~~ a very good predictor of future quits and that job satisfaction does not

influence the inclination to become non-employed It further added that the gender

as a factor does not affect job satisfactIOn (Sousa-Poza 2003)

2

Career development or advancement and on the job training have been proven to be

able to improve job satisfaction of the employees Theodossiou and Zangelidis (2009)

claimed that job satisfaction of individual employees in jobs with career prospects is

higher compared with those who are not Using the data from British 2004

Workplace Employee Relations Survey (WERS) Jones et aI (2008) found out that

training has positive association with job satisfaction which in tum can positively

affect the job performance

Reward is another key for staff job satisfaction The study on the effect of four

management commitments to service factors on employees job satisfaction and

service behaviours in Bangkok Thailand showed that rewards empowerment and

training are positively related to job satisfaction while organizational support does

not Moreover job satisfaction has significant impact on customer service behaviour

and cooperation (Tavitiyaman et aI 20 II)

In technical field working schedules recognition training and wage wiH determine

the staff job satisfaction Kharnnayev (2001) in the conference publication shy

retention of high tech employees revealed that technical employees demand for

flexible schedules the opportunity to gain respect and additional income by doing a

job weB and the opportunity to improve their job skills via dedicated learning If the

firm wants its employees to remain satisfied and productive it needs to deliver those

benefits in conjunction with a competitive salary

3

The quality of the service of the service industries can be influenced by employees

job satisfaction and commitment to the organisation The research on th6 influence

of organizational commitment and job satisfaction on service quality of customer-

contact employees in banking call centres (sample size 342 employees in four

telephone call centres of a major UK retail bank) showed that job satisfaction and

organizational commitment of employees can significantly affect the quality of the

service offered (Malhotra amp Mukherjee 2004)

In the teaching profession the teachers demanded for better wages working hours

and day-off related to the career The study on job satisfaction among school

teachers in Cyprus using a sample of 461 teachers and administrators (adapted

version of questionnaire Teacher 2000 Project) claimed that Cypriot teachers chose

this career due to the salary the working hours and the holidays associated with this

profession (Zembylas amp Papanastasiou 2005)

Supervision is another area that is being studied in order to improve the job

satisfaction of the employees The survey carried out on 927 respondents on the job

satisfaction in a stable child welfare workforce found out that supervision

experiencing difficulties with working conditions lack of external client resources

length of employment and being a supervisor can be the highest predictors of job

dissatisfaction (Strand amp Dore 2008)

4

Pusat Khidmat MakJumat Akademik UNlVERSm MALAYSIA SARAWAK

Although the hotel and tourism industry is flourishing the industry faced human

resource challenges The major challenges are employee retention human resource

shortages shortages of qualified managers and the expectations gap between

education and industry (Zhang amp Wu 2004) In short the difficulty of looking for a

suitable candidate for a duty makes staff turnover an urgent issue that needed to be

tackled

Researchers have been searching for the causes of staff turnover According to

Gustafson (2002) the five most cited internal causes of turnover were rate of pay

communication problems lack of advancement oppOltunities lack of recognition for

a job well done and conflict with management while the five most cited external

causes of turnover were better pay elsewhere increases of pay in other industries

low unemployment a strong local or regional economy and low quality of

employees overall

In the academic setting there are a number of factors that can affect the retention of

the academic staff Arulkumaran (1999) claimed that the economic standings

quantum of clinical work numeration retirement age facilities for research criteria

for promotion health care delivery system the financial system and the outlook of 01

the universities which operate differently in South-East Asian countries can

determine the recruitment and retention of academic staff

5

Company policy has been explored to determine its effect on staff retention

Although environmental factors such as local labour markets and individual

employee variables can affect labour turnover organizational factors (company

culture and values) and management behaviour (operational and control variables)

have significantly effect on staff retention rate in retail industry (Booth amp Hamer

2007)

The results from the decision trees using the sample data from a questionnaire survey

of 237 managers in Singapore showed that there is positive significantly association

between ethical culture constructs (top management support for ethical behaviour

and the association between ethical behaviour and career success within the

organization) and job satisfaction It also supp0l1ed that job satisfaction was

positively related to organizational commitment (Koh amp Boh 2004)

Improving employee job satisfaction and staff retention may be able to enhance

customer satisfaction In health care facilities the research on employee satisfaction

and employee retention as catalysts to patient satisfaction illustrated that focusing on

employee satisfaction and subsequently employee retention could be the catalysts to

patient satisfaction (Collins et aI 2008)

6

111 The Malaysian Scenario

As Malaysia strived to upgrade from a middle income nation to a high Income

country In order to achieve the targets of Wawasan 2020 her reliance on

productivity and irulOvation to drive economic growth has become even greater

Under the 10th Malaysia Plan talent management had been identified as the key to

succeed (Baharin et aI 201l)

Compared to working population China the Malaysians upheld different values in

workplace Although the tendency to quit is affected by the vvorkers key-degree

performance visibility off-job recompense and reward fairness in China the staff

turnover rate among Malaysians is influenced by the current management for

retaining talents job-coupling and equity of rewards that may impact the talents job

satisfaction and organizational commitment (Zheng et aI 2009)

It is difficult to find the proper talent that can carry out the duty properly in a firm

especially in the service industry The 2-Phase survey (169 human resource

managers from service companies) that investigated the gap between cooperate

needs and availability of skills and attributes among the talent pool of Malaysia

service found out that there was a gap between i~dustry needs and the availability of

important competencies within the pool of prospective workers The service industry

looked for those with competencies in communication information technology

customer relationship management and exhibited high motivation and career

7

commitment (Downe et ai 2012) This reiterated the importance of retaining the

skillful staff in a finn

Organizational justice as part of company policy is important in detennining the

Malaysian job satisfaction and tumover intention Based on the finding on the impact

of organizational justice on employees jobs satisfaction in Klang Valley Malaysia

the high level of employees perception towards faimess to means used to detennine

outcomes (procedural justice) and faimess of the outcomes employees receive

(distributive justice) can increase the level of employees job satisfaction

organizational commitment and reduce tumover intention (Choong et aI 20 II)

Another component of company policy - management is also essential in shaping the

job satisfaction among Malaysians The study on the job satisfaction level among

human resource employees in Malaysia by investigating employee relationship with

management compensation and benefits and working environment as independent

variables to job satisfaction demonstrated that the employee relationship with

management has greater influence on job satisfaction than the other variables

compensation and benefits and working environment (Teoh et ai 2011)

The role of supervision that can affect the job satisfaction in Malaysia cannot be

ignored The result from the study on the impact of mentoring and job satisfaction in

Malaysian SMEs revealed that career mentoring has positive relationship with all

dimensions of job satisfaction studies co-workers job itself promotions and

supervisors (Lo amp Ramayah 2011)

8

Furthennore the employers need to pay attention to the working condition as part of

the dimension of job satisfaction to retain their high perfonners The research that

uses Herzbergs motivation-hygiene theory and job satisfaction in Malaysia retail

sector at Bandar Sunway Shopping Mall Selangor indicated that working conditions

are the most significant in motivating sales personnel followed by recognition

company policy and salary (Tan amp Arona 2011)

12 Problem Statement

The study conducted by Aon Hewitts (2010) showed that the average overall

tumover rate (including voluntary and involuntary) for participating organizations is

157 percent for 2010 Furthennore the voluntary tumover rate for Malaysia has

increased from 101 in 2009 to 13 in 2010 It is hard to retain the workers with

the characteristic of job loyalty in non-manufacturing sectors as 75 of the

supervisor level will hops their jobs within a year stated by Goh (2012)

The Star Newspaper (Feb 19 2012) reported that in non-manufacturing sectors

some employsrs have to replace 75 of their executives who switch jobs within a

year According to Malaysian Employers Federation (MEF) executive director

Shamsuddin Bardan indicated that it cost an employer an average RM25 000 to

RM30 000 to replace each employee who quit The cost for it includes advertising

interview screening background checks training and medical check-up Hence

9

retaining an employee is a challenging task for an employer Private companies face

trouble if there is a shortage of employees to contribute to the companies

Malaysia is lagging behind in the war for talent even though our country has made

various efforts to retain and attract the talent in the country The Talent Roadmap

2020 launched by Prime Minister Datuk Seri Najib Razak has the following

objectives optimising Malaysian talent attracting and facilitating global talent and

building a network of top talent Lim (2012) a reporter from Sin Chiew Daily

mentioned that there used to be 200 talents (graduates on government scholarship)

returned and served in various government department but only one stayed after five

years

Since our nation gained independence our nation has experienced a tremendous

increase in our living standards We lead a comfortable life And the price to pay for

higher living standards will be higher cost of living The educated youngsters who

prefer to enjoy their lives are willing to spend the expenses on entertainments They

are different from their previous generations who would rather keep and save their

money to give better environment for their next generations

The Malaysian Trades Union Congress (MTUC) secretary-general Abdul Halim

Mansor pointed out that the rising cost of living could result in high turnover rate

among workers When their salaries cannot meet the cost of living they will start

hunting for a better-paying job Moreover the scenarios usually occur to semishy

10

skilled workers if compared with less skilled workers who work on the production

floor Therefore the turnover rate is increasing with the rise of the living cost

Engaging talented personnel is proven to be a difficult task for private employers

because heshe determines the survival and development of the company in this

competitive economic environment Each employee might have different need that

the employer should try to accommodate in order to prevent job hopping

In order words it is hard to establish staff loyalty as there are many intrinsic and

extrinsic factors that influence the individuals decision to leave a company such as

the personal factors job factors and benefits factors For instance culture

management level and the workforce environment of an organisation might be

another issue of influencing the turnover rate of a company

Lower emotional exhaustion more support from the school and higher job

satisfaction are needed to keep the music teachers in school The survey of 93 music

teachers from private music schools around Klang Valley in Malaysia indicated that

the support from the music schools high job satisfaction and low emotional

exhaustion apd pressure of teaching will likely prevent them from job hopping

(Wong amp Tay 2010)

A committed employee who has high job involvement and job satisfaction will less

likely to leave the firm The questionnaire survey conducted on 116 Information

Systems (IS) personnel working in multinational companies in Malaysia showed that

11

IS personnels job involvement and jobs satisfaction that are positively related to

organizational commitment have significant impact on their tendency to leave a job

(Teh amp Tritos 2011)

13 Research Objectives

The purposes of this study are to in context of employees working at Sibu to

examine the relationship between job satisfaction (intrinsicmotivation factors and

extrinsichygiene factors) towards employee retention Besides that the research

objective IS to investigate

(intrinsicmotivation factors and

retention

the

ext

relationship

rinsichygiene

between

factors)

job

towards

satisfaction

employee

14 Research Questions

The study is to address as the questions in context of employees working at Sibu

The first qu~stion is about What is the relationship the relationship between job

satisfaction and employee retention The second question is determined What is

the relationship between the extrinsichygiene factors and intrinsicmotivation factors

of job satisfaction and employee retention Lastly the question of What is the

most important factor in detennining the employee retention of the private sectors in

Sibu Sarawak Malaysia

12

15 Definition of Key Terms

Employee Engagement

Employee engagement- Kahn (1990) claim that utilize the commitment or

contribution of an employee self-governance by their putting their efforts skills and

knowledge towards their works physically cognitively and emotionally from the

start being employed in an organisation

Talent Turnover

Gustafson (2002) defined turnover as the ratio of the number of organizational

members who have left during the period being considered divided by the average

number of people in that organization during that period For managers it means the

entire process associated with filling a vacancy Turnover is also known as the

replacement cycle when a position is vacated each time either voluntarily or

involuntarily a new employee is hired and trained

Job Satisfaction

Job satisfaction is an attitude that individuals have about their jobs It results from

their perception of the degree to which there is good fit between the individual and

the organisation Ivancevich et aI s (1997 p 91) Job satisfaction is also described

as an emotional response towards various facets of ones job such as equitable pay

and working conditions (Kreitner Kinicki amp Buelens 1999)

13

Page 3: JOB SATISFACTION TOWARDS EMPLOYEE RETENTION … Satisfaction Towards Employee... · paper is designed to understand the job satisfaction towards employee retention among ... questionnaire

APPROVAL PAGE

I certified that I have supervised and read this study and in my opinion it conforms to

acceptable standards of scholarly presentation and is fully adequate in scope and quality

as a research paper for the degree of Corporate Master in Business Administration

Associate Professor Dr Lo May Chiun Supervisor

This research paper was submitted to the Faculty of Economics and Business UNIMAS

and is accepted as partial fulfillment of the requirements for the degree of Corporate

Master in Business Administration

bull

Professor Dr Shazali bin Abu Mansor Dean Faculty of Economics and Business UNIMAS

STATEl1ENT OF ORIGINALITY

The work described in this Research Paper entitled

JOB SATISFACTION TOWARDS EMPLOYEE RETENTION AMONG

PRIVATE SECTOR EMPLOYEES IN SIBU SARAWAK MALAYSIA

is to the best of the authors knowledge that of the author except

where due reference is made

Date SOPHIA WONG WANG SZU 10031730

ABSTRACT

JOB SATISFACTION TOWARDS EMPLOYEE RETENTION

AMONG PRIVATE SECTOR EMPLOYEES IN SIBU SARA WAK

MALAYSIA

By

SOPHIA WONG WANG SZU

~hiS paper is designed to understand the job satisfaction towards employee retention

among private sector employee in Sibu Sarawak Malaysia Data was collected through

questionnaire among private company in Sibu The data were analysed by using

Statistical Package for Social Science (SPSS) version 170 for Microsoft Windows The

intrinsic job satisfaction factors have been found to be able to significantly affect the

employee retention of private company in Sibu Sarawak Malaysia

ABSTRAK

KEPUASAN KERJA KE ARAH PENYIMPANAN PEKERJA DI

KALANGAN PEKERJA SEKTOR SWASTA DI SIBU SARAWAK

MALAYSIA

Oleh

SOPHIA WONG WANG SZU

Tujuan utama kertas kerja ini adalah untuk menghubungkaitkan kepuasan pekeJja dalam

kerjaya masing-masing dengan pengekalan pekerja-pekerja di sektor swasta di Sibu

Sarawak Malaysia Data telah dikumpulkan melalui soal selidik di syarikat-syarikat

swasta di Sibu Kesemua data ini dianalisis dengan menggunakan Statistical Package for

Social Science (SPSS) versi 170 untuk Microsoft Windows Faktor-faktor intrinsik bagi

kepuasan terhadap pekerjaan didapati boleh mempengaruhi pengekatan pekerja-pekerja

di syarikat swasta di Sibu Sarawak Malaysia dengan amat ketara

ACKNOWLEDGEMENTS

First I would like to express my thankfulness to my superisor Associate Professor Dr

Lo May Chiun for her continuous invaluable assistance and leading me with her

experience throughout the entire process towards the completion of this research

Besides that the support from my parents family members and friends who give and

encourage me an opportunity to continue my CMBA from financial and physical supports

Supporting from friends cannot be ignored expecially Law Lee Muan

In addition I would like to express grateful thanks for those respondents who contribute

and help for data collections

I

Pu~at Khidmat MakJumat Akad ik UNIVERSITI MALAYSIA SARA~k

TABLE OF CONTENTS

Page

List of Tables Xll

CHAPTER ONE INTRODUCTION

ll Background

111 The Malaysian Scenario 7

12 Problem Statement 9

13 Research Objectives 12

14 Research Questions 12

15 Definition of Key Terms 13

16 Significance of Study 15

17 Scope of the Study 16

18 Organization of Chapters 16

CHAPTER TWO LITERATURE REVIEW

21 Introduction 18

22 Definition of Models 18

23 Antecedents of Job Satisfaction 20

231 Work Itself 20

23 2 Recognition 21

233 Company Policies 22

234 Supervisions 23

V III

235 Salaries 24 J

2523 6 Working Conditions

24 Consequences of Job Satisfaction 26

2624 1 Employee Retention

25 The Concept of Job Satisfaction and Employee Retention 28

2825 1 Job Satisfaction

25 2 Employee Retention 29

2926 Underlying Theory

261 HerzbergS Theory 30

262 The Job Embeddedness Model (JEM) of Tumover 30

263 Empowerment Theory 31

3227 Theoretical Framework

271 Gap in the Literature 33

272 Justification of the Theoretical Framework 33

34273 Description of Variables

274 Development of Hypothesis 34

CHAPTER THREE METHODOLOGY

3731 Introduction

3732 Research Site

3733 Research Design Sample and Procedure

3833 1 Data Collection Procedure

3934 Research Questionnaire

ix

-

F

35 Measures 40

36 Pilot Study 41

37 Statistical Analyses 42

371 Descriptive Statistic 42

372 Reliability Analysis 42

373 Correlation 43

374 Regression Analysis 44

38 Summary 44

CHAPTER FOUR RESEARCH FINDINGS

41 Introduction 45

42 Demographic Profile of Respondents 45

43 Goodness of Measures 48

44 Reliability Analysis 49

45 Descriptive Statistics 50

46 Correlation Analysis - Pearson Correlations Matrix 51

47 Regression Analysis 52

48 Hypothesis Testing 53

48l IntrinsiclMotivation Factors towards E~ployee Retention 53

482 ExtrinsicHygiene Factors towards Employee Retention 53

49 Conclusion 54

x

I

CHAPTER FIVE DISCUSSION AND CONCLUSION

51 Introduction 55

52 The Backdrop 55

53 Discussion 56

531 IntrinsiclMotivation Job Satisfaction Factors in Staff Retention 57

532 ExtrinsicHygiene Job Satisfaction Factors in Staff Retention 58

54 Implications 60

55 Potential Limitations 63

56 Directions for Future Research 64

57 Conclusion 65

REFERENCES

APPENDIX

xi

LIST OF TABLES

Pages

Table 21 Employee Satisfaction Theory (Motivation amp Hygiene) 30

Table 22 Independent Variables and Dependent Variable 32

Table 31 Total Questionnaire Distributed Collected and Unretumed 38

Questionnaire

Table 32 Interpretation of the Correlation Coefficient 43

Table 41 Frequency Profile of Respondents 47

Table 42 Reliability Analysis 49

Table 43 Descriptive Statistics 50

Table 44 Correlation Analysis - Pearson Correlations Matrix 51

Table 45 Regression Analysis 52

XII

I

The above statistic demonstrated the importance of talent pool for a company

Indeed proper talent management approach especially those skilled labours are able

to contribute more than their low-skilled counterparts The MicKinsey Quarterly

claimed that knowledge workers can create more profit than others employees do shy

up to three times more and their work requires minimal oversight

Both intrinsic and extrinsic motivation factors can affect and enhance the job

satisfaction of the employees Halepota (2005) conceived motivations as a person

prescribed by the active participation and commitment to the achievement of results

Furthermore he added motivated concept is an abstract construct because different

strategies have different results at different times In other words the results may

change and varies from times to times as with only one strategy that can produce to

ensure guaranteed favourable outcome all the times

Employee job satisfaction has been explored and used to improve the talent turnover

for the firm According Hom and Kinicki (200 I) job satisfaction is a useful strategy

to prevent turnover rate for an employee The paper that analyzes the effect of job

satisfaction on labour turnover by gender in Switzerland revealed that job

satisfaction ~~ a very good predictor of future quits and that job satisfaction does not

influence the inclination to become non-employed It further added that the gender

as a factor does not affect job satisfactIOn (Sousa-Poza 2003)

2

Career development or advancement and on the job training have been proven to be

able to improve job satisfaction of the employees Theodossiou and Zangelidis (2009)

claimed that job satisfaction of individual employees in jobs with career prospects is

higher compared with those who are not Using the data from British 2004

Workplace Employee Relations Survey (WERS) Jones et aI (2008) found out that

training has positive association with job satisfaction which in tum can positively

affect the job performance

Reward is another key for staff job satisfaction The study on the effect of four

management commitments to service factors on employees job satisfaction and

service behaviours in Bangkok Thailand showed that rewards empowerment and

training are positively related to job satisfaction while organizational support does

not Moreover job satisfaction has significant impact on customer service behaviour

and cooperation (Tavitiyaman et aI 20 II)

In technical field working schedules recognition training and wage wiH determine

the staff job satisfaction Kharnnayev (2001) in the conference publication shy

retention of high tech employees revealed that technical employees demand for

flexible schedules the opportunity to gain respect and additional income by doing a

job weB and the opportunity to improve their job skills via dedicated learning If the

firm wants its employees to remain satisfied and productive it needs to deliver those

benefits in conjunction with a competitive salary

3

The quality of the service of the service industries can be influenced by employees

job satisfaction and commitment to the organisation The research on th6 influence

of organizational commitment and job satisfaction on service quality of customer-

contact employees in banking call centres (sample size 342 employees in four

telephone call centres of a major UK retail bank) showed that job satisfaction and

organizational commitment of employees can significantly affect the quality of the

service offered (Malhotra amp Mukherjee 2004)

In the teaching profession the teachers demanded for better wages working hours

and day-off related to the career The study on job satisfaction among school

teachers in Cyprus using a sample of 461 teachers and administrators (adapted

version of questionnaire Teacher 2000 Project) claimed that Cypriot teachers chose

this career due to the salary the working hours and the holidays associated with this

profession (Zembylas amp Papanastasiou 2005)

Supervision is another area that is being studied in order to improve the job

satisfaction of the employees The survey carried out on 927 respondents on the job

satisfaction in a stable child welfare workforce found out that supervision

experiencing difficulties with working conditions lack of external client resources

length of employment and being a supervisor can be the highest predictors of job

dissatisfaction (Strand amp Dore 2008)

4

Pusat Khidmat MakJumat Akademik UNlVERSm MALAYSIA SARAWAK

Although the hotel and tourism industry is flourishing the industry faced human

resource challenges The major challenges are employee retention human resource

shortages shortages of qualified managers and the expectations gap between

education and industry (Zhang amp Wu 2004) In short the difficulty of looking for a

suitable candidate for a duty makes staff turnover an urgent issue that needed to be

tackled

Researchers have been searching for the causes of staff turnover According to

Gustafson (2002) the five most cited internal causes of turnover were rate of pay

communication problems lack of advancement oppOltunities lack of recognition for

a job well done and conflict with management while the five most cited external

causes of turnover were better pay elsewhere increases of pay in other industries

low unemployment a strong local or regional economy and low quality of

employees overall

In the academic setting there are a number of factors that can affect the retention of

the academic staff Arulkumaran (1999) claimed that the economic standings

quantum of clinical work numeration retirement age facilities for research criteria

for promotion health care delivery system the financial system and the outlook of 01

the universities which operate differently in South-East Asian countries can

determine the recruitment and retention of academic staff

5

Company policy has been explored to determine its effect on staff retention

Although environmental factors such as local labour markets and individual

employee variables can affect labour turnover organizational factors (company

culture and values) and management behaviour (operational and control variables)

have significantly effect on staff retention rate in retail industry (Booth amp Hamer

2007)

The results from the decision trees using the sample data from a questionnaire survey

of 237 managers in Singapore showed that there is positive significantly association

between ethical culture constructs (top management support for ethical behaviour

and the association between ethical behaviour and career success within the

organization) and job satisfaction It also supp0l1ed that job satisfaction was

positively related to organizational commitment (Koh amp Boh 2004)

Improving employee job satisfaction and staff retention may be able to enhance

customer satisfaction In health care facilities the research on employee satisfaction

and employee retention as catalysts to patient satisfaction illustrated that focusing on

employee satisfaction and subsequently employee retention could be the catalysts to

patient satisfaction (Collins et aI 2008)

6

111 The Malaysian Scenario

As Malaysia strived to upgrade from a middle income nation to a high Income

country In order to achieve the targets of Wawasan 2020 her reliance on

productivity and irulOvation to drive economic growth has become even greater

Under the 10th Malaysia Plan talent management had been identified as the key to

succeed (Baharin et aI 201l)

Compared to working population China the Malaysians upheld different values in

workplace Although the tendency to quit is affected by the vvorkers key-degree

performance visibility off-job recompense and reward fairness in China the staff

turnover rate among Malaysians is influenced by the current management for

retaining talents job-coupling and equity of rewards that may impact the talents job

satisfaction and organizational commitment (Zheng et aI 2009)

It is difficult to find the proper talent that can carry out the duty properly in a firm

especially in the service industry The 2-Phase survey (169 human resource

managers from service companies) that investigated the gap between cooperate

needs and availability of skills and attributes among the talent pool of Malaysia

service found out that there was a gap between i~dustry needs and the availability of

important competencies within the pool of prospective workers The service industry

looked for those with competencies in communication information technology

customer relationship management and exhibited high motivation and career

7

commitment (Downe et ai 2012) This reiterated the importance of retaining the

skillful staff in a finn

Organizational justice as part of company policy is important in detennining the

Malaysian job satisfaction and tumover intention Based on the finding on the impact

of organizational justice on employees jobs satisfaction in Klang Valley Malaysia

the high level of employees perception towards faimess to means used to detennine

outcomes (procedural justice) and faimess of the outcomes employees receive

(distributive justice) can increase the level of employees job satisfaction

organizational commitment and reduce tumover intention (Choong et aI 20 II)

Another component of company policy - management is also essential in shaping the

job satisfaction among Malaysians The study on the job satisfaction level among

human resource employees in Malaysia by investigating employee relationship with

management compensation and benefits and working environment as independent

variables to job satisfaction demonstrated that the employee relationship with

management has greater influence on job satisfaction than the other variables

compensation and benefits and working environment (Teoh et ai 2011)

The role of supervision that can affect the job satisfaction in Malaysia cannot be

ignored The result from the study on the impact of mentoring and job satisfaction in

Malaysian SMEs revealed that career mentoring has positive relationship with all

dimensions of job satisfaction studies co-workers job itself promotions and

supervisors (Lo amp Ramayah 2011)

8

Furthennore the employers need to pay attention to the working condition as part of

the dimension of job satisfaction to retain their high perfonners The research that

uses Herzbergs motivation-hygiene theory and job satisfaction in Malaysia retail

sector at Bandar Sunway Shopping Mall Selangor indicated that working conditions

are the most significant in motivating sales personnel followed by recognition

company policy and salary (Tan amp Arona 2011)

12 Problem Statement

The study conducted by Aon Hewitts (2010) showed that the average overall

tumover rate (including voluntary and involuntary) for participating organizations is

157 percent for 2010 Furthennore the voluntary tumover rate for Malaysia has

increased from 101 in 2009 to 13 in 2010 It is hard to retain the workers with

the characteristic of job loyalty in non-manufacturing sectors as 75 of the

supervisor level will hops their jobs within a year stated by Goh (2012)

The Star Newspaper (Feb 19 2012) reported that in non-manufacturing sectors

some employsrs have to replace 75 of their executives who switch jobs within a

year According to Malaysian Employers Federation (MEF) executive director

Shamsuddin Bardan indicated that it cost an employer an average RM25 000 to

RM30 000 to replace each employee who quit The cost for it includes advertising

interview screening background checks training and medical check-up Hence

9

retaining an employee is a challenging task for an employer Private companies face

trouble if there is a shortage of employees to contribute to the companies

Malaysia is lagging behind in the war for talent even though our country has made

various efforts to retain and attract the talent in the country The Talent Roadmap

2020 launched by Prime Minister Datuk Seri Najib Razak has the following

objectives optimising Malaysian talent attracting and facilitating global talent and

building a network of top talent Lim (2012) a reporter from Sin Chiew Daily

mentioned that there used to be 200 talents (graduates on government scholarship)

returned and served in various government department but only one stayed after five

years

Since our nation gained independence our nation has experienced a tremendous

increase in our living standards We lead a comfortable life And the price to pay for

higher living standards will be higher cost of living The educated youngsters who

prefer to enjoy their lives are willing to spend the expenses on entertainments They

are different from their previous generations who would rather keep and save their

money to give better environment for their next generations

The Malaysian Trades Union Congress (MTUC) secretary-general Abdul Halim

Mansor pointed out that the rising cost of living could result in high turnover rate

among workers When their salaries cannot meet the cost of living they will start

hunting for a better-paying job Moreover the scenarios usually occur to semishy

10

skilled workers if compared with less skilled workers who work on the production

floor Therefore the turnover rate is increasing with the rise of the living cost

Engaging talented personnel is proven to be a difficult task for private employers

because heshe determines the survival and development of the company in this

competitive economic environment Each employee might have different need that

the employer should try to accommodate in order to prevent job hopping

In order words it is hard to establish staff loyalty as there are many intrinsic and

extrinsic factors that influence the individuals decision to leave a company such as

the personal factors job factors and benefits factors For instance culture

management level and the workforce environment of an organisation might be

another issue of influencing the turnover rate of a company

Lower emotional exhaustion more support from the school and higher job

satisfaction are needed to keep the music teachers in school The survey of 93 music

teachers from private music schools around Klang Valley in Malaysia indicated that

the support from the music schools high job satisfaction and low emotional

exhaustion apd pressure of teaching will likely prevent them from job hopping

(Wong amp Tay 2010)

A committed employee who has high job involvement and job satisfaction will less

likely to leave the firm The questionnaire survey conducted on 116 Information

Systems (IS) personnel working in multinational companies in Malaysia showed that

11

IS personnels job involvement and jobs satisfaction that are positively related to

organizational commitment have significant impact on their tendency to leave a job

(Teh amp Tritos 2011)

13 Research Objectives

The purposes of this study are to in context of employees working at Sibu to

examine the relationship between job satisfaction (intrinsicmotivation factors and

extrinsichygiene factors) towards employee retention Besides that the research

objective IS to investigate

(intrinsicmotivation factors and

retention

the

ext

relationship

rinsichygiene

between

factors)

job

towards

satisfaction

employee

14 Research Questions

The study is to address as the questions in context of employees working at Sibu

The first qu~stion is about What is the relationship the relationship between job

satisfaction and employee retention The second question is determined What is

the relationship between the extrinsichygiene factors and intrinsicmotivation factors

of job satisfaction and employee retention Lastly the question of What is the

most important factor in detennining the employee retention of the private sectors in

Sibu Sarawak Malaysia

12

15 Definition of Key Terms

Employee Engagement

Employee engagement- Kahn (1990) claim that utilize the commitment or

contribution of an employee self-governance by their putting their efforts skills and

knowledge towards their works physically cognitively and emotionally from the

start being employed in an organisation

Talent Turnover

Gustafson (2002) defined turnover as the ratio of the number of organizational

members who have left during the period being considered divided by the average

number of people in that organization during that period For managers it means the

entire process associated with filling a vacancy Turnover is also known as the

replacement cycle when a position is vacated each time either voluntarily or

involuntarily a new employee is hired and trained

Job Satisfaction

Job satisfaction is an attitude that individuals have about their jobs It results from

their perception of the degree to which there is good fit between the individual and

the organisation Ivancevich et aI s (1997 p 91) Job satisfaction is also described

as an emotional response towards various facets of ones job such as equitable pay

and working conditions (Kreitner Kinicki amp Buelens 1999)

13

Page 4: JOB SATISFACTION TOWARDS EMPLOYEE RETENTION … Satisfaction Towards Employee... · paper is designed to understand the job satisfaction towards employee retention among ... questionnaire

STATEl1ENT OF ORIGINALITY

The work described in this Research Paper entitled

JOB SATISFACTION TOWARDS EMPLOYEE RETENTION AMONG

PRIVATE SECTOR EMPLOYEES IN SIBU SARAWAK MALAYSIA

is to the best of the authors knowledge that of the author except

where due reference is made

Date SOPHIA WONG WANG SZU 10031730

ABSTRACT

JOB SATISFACTION TOWARDS EMPLOYEE RETENTION

AMONG PRIVATE SECTOR EMPLOYEES IN SIBU SARA WAK

MALAYSIA

By

SOPHIA WONG WANG SZU

~hiS paper is designed to understand the job satisfaction towards employee retention

among private sector employee in Sibu Sarawak Malaysia Data was collected through

questionnaire among private company in Sibu The data were analysed by using

Statistical Package for Social Science (SPSS) version 170 for Microsoft Windows The

intrinsic job satisfaction factors have been found to be able to significantly affect the

employee retention of private company in Sibu Sarawak Malaysia

ABSTRAK

KEPUASAN KERJA KE ARAH PENYIMPANAN PEKERJA DI

KALANGAN PEKERJA SEKTOR SWASTA DI SIBU SARAWAK

MALAYSIA

Oleh

SOPHIA WONG WANG SZU

Tujuan utama kertas kerja ini adalah untuk menghubungkaitkan kepuasan pekeJja dalam

kerjaya masing-masing dengan pengekalan pekerja-pekerja di sektor swasta di Sibu

Sarawak Malaysia Data telah dikumpulkan melalui soal selidik di syarikat-syarikat

swasta di Sibu Kesemua data ini dianalisis dengan menggunakan Statistical Package for

Social Science (SPSS) versi 170 untuk Microsoft Windows Faktor-faktor intrinsik bagi

kepuasan terhadap pekerjaan didapati boleh mempengaruhi pengekatan pekerja-pekerja

di syarikat swasta di Sibu Sarawak Malaysia dengan amat ketara

ACKNOWLEDGEMENTS

First I would like to express my thankfulness to my superisor Associate Professor Dr

Lo May Chiun for her continuous invaluable assistance and leading me with her

experience throughout the entire process towards the completion of this research

Besides that the support from my parents family members and friends who give and

encourage me an opportunity to continue my CMBA from financial and physical supports

Supporting from friends cannot be ignored expecially Law Lee Muan

In addition I would like to express grateful thanks for those respondents who contribute

and help for data collections

I

Pu~at Khidmat MakJumat Akad ik UNIVERSITI MALAYSIA SARA~k

TABLE OF CONTENTS

Page

List of Tables Xll

CHAPTER ONE INTRODUCTION

ll Background

111 The Malaysian Scenario 7

12 Problem Statement 9

13 Research Objectives 12

14 Research Questions 12

15 Definition of Key Terms 13

16 Significance of Study 15

17 Scope of the Study 16

18 Organization of Chapters 16

CHAPTER TWO LITERATURE REVIEW

21 Introduction 18

22 Definition of Models 18

23 Antecedents of Job Satisfaction 20

231 Work Itself 20

23 2 Recognition 21

233 Company Policies 22

234 Supervisions 23

V III

235 Salaries 24 J

2523 6 Working Conditions

24 Consequences of Job Satisfaction 26

2624 1 Employee Retention

25 The Concept of Job Satisfaction and Employee Retention 28

2825 1 Job Satisfaction

25 2 Employee Retention 29

2926 Underlying Theory

261 HerzbergS Theory 30

262 The Job Embeddedness Model (JEM) of Tumover 30

263 Empowerment Theory 31

3227 Theoretical Framework

271 Gap in the Literature 33

272 Justification of the Theoretical Framework 33

34273 Description of Variables

274 Development of Hypothesis 34

CHAPTER THREE METHODOLOGY

3731 Introduction

3732 Research Site

3733 Research Design Sample and Procedure

3833 1 Data Collection Procedure

3934 Research Questionnaire

ix

-

F

35 Measures 40

36 Pilot Study 41

37 Statistical Analyses 42

371 Descriptive Statistic 42

372 Reliability Analysis 42

373 Correlation 43

374 Regression Analysis 44

38 Summary 44

CHAPTER FOUR RESEARCH FINDINGS

41 Introduction 45

42 Demographic Profile of Respondents 45

43 Goodness of Measures 48

44 Reliability Analysis 49

45 Descriptive Statistics 50

46 Correlation Analysis - Pearson Correlations Matrix 51

47 Regression Analysis 52

48 Hypothesis Testing 53

48l IntrinsiclMotivation Factors towards E~ployee Retention 53

482 ExtrinsicHygiene Factors towards Employee Retention 53

49 Conclusion 54

x

I

CHAPTER FIVE DISCUSSION AND CONCLUSION

51 Introduction 55

52 The Backdrop 55

53 Discussion 56

531 IntrinsiclMotivation Job Satisfaction Factors in Staff Retention 57

532 ExtrinsicHygiene Job Satisfaction Factors in Staff Retention 58

54 Implications 60

55 Potential Limitations 63

56 Directions for Future Research 64

57 Conclusion 65

REFERENCES

APPENDIX

xi

LIST OF TABLES

Pages

Table 21 Employee Satisfaction Theory (Motivation amp Hygiene) 30

Table 22 Independent Variables and Dependent Variable 32

Table 31 Total Questionnaire Distributed Collected and Unretumed 38

Questionnaire

Table 32 Interpretation of the Correlation Coefficient 43

Table 41 Frequency Profile of Respondents 47

Table 42 Reliability Analysis 49

Table 43 Descriptive Statistics 50

Table 44 Correlation Analysis - Pearson Correlations Matrix 51

Table 45 Regression Analysis 52

XII

I

The above statistic demonstrated the importance of talent pool for a company

Indeed proper talent management approach especially those skilled labours are able

to contribute more than their low-skilled counterparts The MicKinsey Quarterly

claimed that knowledge workers can create more profit than others employees do shy

up to three times more and their work requires minimal oversight

Both intrinsic and extrinsic motivation factors can affect and enhance the job

satisfaction of the employees Halepota (2005) conceived motivations as a person

prescribed by the active participation and commitment to the achievement of results

Furthermore he added motivated concept is an abstract construct because different

strategies have different results at different times In other words the results may

change and varies from times to times as with only one strategy that can produce to

ensure guaranteed favourable outcome all the times

Employee job satisfaction has been explored and used to improve the talent turnover

for the firm According Hom and Kinicki (200 I) job satisfaction is a useful strategy

to prevent turnover rate for an employee The paper that analyzes the effect of job

satisfaction on labour turnover by gender in Switzerland revealed that job

satisfaction ~~ a very good predictor of future quits and that job satisfaction does not

influence the inclination to become non-employed It further added that the gender

as a factor does not affect job satisfactIOn (Sousa-Poza 2003)

2

Career development or advancement and on the job training have been proven to be

able to improve job satisfaction of the employees Theodossiou and Zangelidis (2009)

claimed that job satisfaction of individual employees in jobs with career prospects is

higher compared with those who are not Using the data from British 2004

Workplace Employee Relations Survey (WERS) Jones et aI (2008) found out that

training has positive association with job satisfaction which in tum can positively

affect the job performance

Reward is another key for staff job satisfaction The study on the effect of four

management commitments to service factors on employees job satisfaction and

service behaviours in Bangkok Thailand showed that rewards empowerment and

training are positively related to job satisfaction while organizational support does

not Moreover job satisfaction has significant impact on customer service behaviour

and cooperation (Tavitiyaman et aI 20 II)

In technical field working schedules recognition training and wage wiH determine

the staff job satisfaction Kharnnayev (2001) in the conference publication shy

retention of high tech employees revealed that technical employees demand for

flexible schedules the opportunity to gain respect and additional income by doing a

job weB and the opportunity to improve their job skills via dedicated learning If the

firm wants its employees to remain satisfied and productive it needs to deliver those

benefits in conjunction with a competitive salary

3

The quality of the service of the service industries can be influenced by employees

job satisfaction and commitment to the organisation The research on th6 influence

of organizational commitment and job satisfaction on service quality of customer-

contact employees in banking call centres (sample size 342 employees in four

telephone call centres of a major UK retail bank) showed that job satisfaction and

organizational commitment of employees can significantly affect the quality of the

service offered (Malhotra amp Mukherjee 2004)

In the teaching profession the teachers demanded for better wages working hours

and day-off related to the career The study on job satisfaction among school

teachers in Cyprus using a sample of 461 teachers and administrators (adapted

version of questionnaire Teacher 2000 Project) claimed that Cypriot teachers chose

this career due to the salary the working hours and the holidays associated with this

profession (Zembylas amp Papanastasiou 2005)

Supervision is another area that is being studied in order to improve the job

satisfaction of the employees The survey carried out on 927 respondents on the job

satisfaction in a stable child welfare workforce found out that supervision

experiencing difficulties with working conditions lack of external client resources

length of employment and being a supervisor can be the highest predictors of job

dissatisfaction (Strand amp Dore 2008)

4

Pusat Khidmat MakJumat Akademik UNlVERSm MALAYSIA SARAWAK

Although the hotel and tourism industry is flourishing the industry faced human

resource challenges The major challenges are employee retention human resource

shortages shortages of qualified managers and the expectations gap between

education and industry (Zhang amp Wu 2004) In short the difficulty of looking for a

suitable candidate for a duty makes staff turnover an urgent issue that needed to be

tackled

Researchers have been searching for the causes of staff turnover According to

Gustafson (2002) the five most cited internal causes of turnover were rate of pay

communication problems lack of advancement oppOltunities lack of recognition for

a job well done and conflict with management while the five most cited external

causes of turnover were better pay elsewhere increases of pay in other industries

low unemployment a strong local or regional economy and low quality of

employees overall

In the academic setting there are a number of factors that can affect the retention of

the academic staff Arulkumaran (1999) claimed that the economic standings

quantum of clinical work numeration retirement age facilities for research criteria

for promotion health care delivery system the financial system and the outlook of 01

the universities which operate differently in South-East Asian countries can

determine the recruitment and retention of academic staff

5

Company policy has been explored to determine its effect on staff retention

Although environmental factors such as local labour markets and individual

employee variables can affect labour turnover organizational factors (company

culture and values) and management behaviour (operational and control variables)

have significantly effect on staff retention rate in retail industry (Booth amp Hamer

2007)

The results from the decision trees using the sample data from a questionnaire survey

of 237 managers in Singapore showed that there is positive significantly association

between ethical culture constructs (top management support for ethical behaviour

and the association between ethical behaviour and career success within the

organization) and job satisfaction It also supp0l1ed that job satisfaction was

positively related to organizational commitment (Koh amp Boh 2004)

Improving employee job satisfaction and staff retention may be able to enhance

customer satisfaction In health care facilities the research on employee satisfaction

and employee retention as catalysts to patient satisfaction illustrated that focusing on

employee satisfaction and subsequently employee retention could be the catalysts to

patient satisfaction (Collins et aI 2008)

6

111 The Malaysian Scenario

As Malaysia strived to upgrade from a middle income nation to a high Income

country In order to achieve the targets of Wawasan 2020 her reliance on

productivity and irulOvation to drive economic growth has become even greater

Under the 10th Malaysia Plan talent management had been identified as the key to

succeed (Baharin et aI 201l)

Compared to working population China the Malaysians upheld different values in

workplace Although the tendency to quit is affected by the vvorkers key-degree

performance visibility off-job recompense and reward fairness in China the staff

turnover rate among Malaysians is influenced by the current management for

retaining talents job-coupling and equity of rewards that may impact the talents job

satisfaction and organizational commitment (Zheng et aI 2009)

It is difficult to find the proper talent that can carry out the duty properly in a firm

especially in the service industry The 2-Phase survey (169 human resource

managers from service companies) that investigated the gap between cooperate

needs and availability of skills and attributes among the talent pool of Malaysia

service found out that there was a gap between i~dustry needs and the availability of

important competencies within the pool of prospective workers The service industry

looked for those with competencies in communication information technology

customer relationship management and exhibited high motivation and career

7

commitment (Downe et ai 2012) This reiterated the importance of retaining the

skillful staff in a finn

Organizational justice as part of company policy is important in detennining the

Malaysian job satisfaction and tumover intention Based on the finding on the impact

of organizational justice on employees jobs satisfaction in Klang Valley Malaysia

the high level of employees perception towards faimess to means used to detennine

outcomes (procedural justice) and faimess of the outcomes employees receive

(distributive justice) can increase the level of employees job satisfaction

organizational commitment and reduce tumover intention (Choong et aI 20 II)

Another component of company policy - management is also essential in shaping the

job satisfaction among Malaysians The study on the job satisfaction level among

human resource employees in Malaysia by investigating employee relationship with

management compensation and benefits and working environment as independent

variables to job satisfaction demonstrated that the employee relationship with

management has greater influence on job satisfaction than the other variables

compensation and benefits and working environment (Teoh et ai 2011)

The role of supervision that can affect the job satisfaction in Malaysia cannot be

ignored The result from the study on the impact of mentoring and job satisfaction in

Malaysian SMEs revealed that career mentoring has positive relationship with all

dimensions of job satisfaction studies co-workers job itself promotions and

supervisors (Lo amp Ramayah 2011)

8

Furthennore the employers need to pay attention to the working condition as part of

the dimension of job satisfaction to retain their high perfonners The research that

uses Herzbergs motivation-hygiene theory and job satisfaction in Malaysia retail

sector at Bandar Sunway Shopping Mall Selangor indicated that working conditions

are the most significant in motivating sales personnel followed by recognition

company policy and salary (Tan amp Arona 2011)

12 Problem Statement

The study conducted by Aon Hewitts (2010) showed that the average overall

tumover rate (including voluntary and involuntary) for participating organizations is

157 percent for 2010 Furthennore the voluntary tumover rate for Malaysia has

increased from 101 in 2009 to 13 in 2010 It is hard to retain the workers with

the characteristic of job loyalty in non-manufacturing sectors as 75 of the

supervisor level will hops their jobs within a year stated by Goh (2012)

The Star Newspaper (Feb 19 2012) reported that in non-manufacturing sectors

some employsrs have to replace 75 of their executives who switch jobs within a

year According to Malaysian Employers Federation (MEF) executive director

Shamsuddin Bardan indicated that it cost an employer an average RM25 000 to

RM30 000 to replace each employee who quit The cost for it includes advertising

interview screening background checks training and medical check-up Hence

9

retaining an employee is a challenging task for an employer Private companies face

trouble if there is a shortage of employees to contribute to the companies

Malaysia is lagging behind in the war for talent even though our country has made

various efforts to retain and attract the talent in the country The Talent Roadmap

2020 launched by Prime Minister Datuk Seri Najib Razak has the following

objectives optimising Malaysian talent attracting and facilitating global talent and

building a network of top talent Lim (2012) a reporter from Sin Chiew Daily

mentioned that there used to be 200 talents (graduates on government scholarship)

returned and served in various government department but only one stayed after five

years

Since our nation gained independence our nation has experienced a tremendous

increase in our living standards We lead a comfortable life And the price to pay for

higher living standards will be higher cost of living The educated youngsters who

prefer to enjoy their lives are willing to spend the expenses on entertainments They

are different from their previous generations who would rather keep and save their

money to give better environment for their next generations

The Malaysian Trades Union Congress (MTUC) secretary-general Abdul Halim

Mansor pointed out that the rising cost of living could result in high turnover rate

among workers When their salaries cannot meet the cost of living they will start

hunting for a better-paying job Moreover the scenarios usually occur to semishy

10

skilled workers if compared with less skilled workers who work on the production

floor Therefore the turnover rate is increasing with the rise of the living cost

Engaging talented personnel is proven to be a difficult task for private employers

because heshe determines the survival and development of the company in this

competitive economic environment Each employee might have different need that

the employer should try to accommodate in order to prevent job hopping

In order words it is hard to establish staff loyalty as there are many intrinsic and

extrinsic factors that influence the individuals decision to leave a company such as

the personal factors job factors and benefits factors For instance culture

management level and the workforce environment of an organisation might be

another issue of influencing the turnover rate of a company

Lower emotional exhaustion more support from the school and higher job

satisfaction are needed to keep the music teachers in school The survey of 93 music

teachers from private music schools around Klang Valley in Malaysia indicated that

the support from the music schools high job satisfaction and low emotional

exhaustion apd pressure of teaching will likely prevent them from job hopping

(Wong amp Tay 2010)

A committed employee who has high job involvement and job satisfaction will less

likely to leave the firm The questionnaire survey conducted on 116 Information

Systems (IS) personnel working in multinational companies in Malaysia showed that

11

IS personnels job involvement and jobs satisfaction that are positively related to

organizational commitment have significant impact on their tendency to leave a job

(Teh amp Tritos 2011)

13 Research Objectives

The purposes of this study are to in context of employees working at Sibu to

examine the relationship between job satisfaction (intrinsicmotivation factors and

extrinsichygiene factors) towards employee retention Besides that the research

objective IS to investigate

(intrinsicmotivation factors and

retention

the

ext

relationship

rinsichygiene

between

factors)

job

towards

satisfaction

employee

14 Research Questions

The study is to address as the questions in context of employees working at Sibu

The first qu~stion is about What is the relationship the relationship between job

satisfaction and employee retention The second question is determined What is

the relationship between the extrinsichygiene factors and intrinsicmotivation factors

of job satisfaction and employee retention Lastly the question of What is the

most important factor in detennining the employee retention of the private sectors in

Sibu Sarawak Malaysia

12

15 Definition of Key Terms

Employee Engagement

Employee engagement- Kahn (1990) claim that utilize the commitment or

contribution of an employee self-governance by their putting their efforts skills and

knowledge towards their works physically cognitively and emotionally from the

start being employed in an organisation

Talent Turnover

Gustafson (2002) defined turnover as the ratio of the number of organizational

members who have left during the period being considered divided by the average

number of people in that organization during that period For managers it means the

entire process associated with filling a vacancy Turnover is also known as the

replacement cycle when a position is vacated each time either voluntarily or

involuntarily a new employee is hired and trained

Job Satisfaction

Job satisfaction is an attitude that individuals have about their jobs It results from

their perception of the degree to which there is good fit between the individual and

the organisation Ivancevich et aI s (1997 p 91) Job satisfaction is also described

as an emotional response towards various facets of ones job such as equitable pay

and working conditions (Kreitner Kinicki amp Buelens 1999)

13

Page 5: JOB SATISFACTION TOWARDS EMPLOYEE RETENTION … Satisfaction Towards Employee... · paper is designed to understand the job satisfaction towards employee retention among ... questionnaire

ABSTRACT

JOB SATISFACTION TOWARDS EMPLOYEE RETENTION

AMONG PRIVATE SECTOR EMPLOYEES IN SIBU SARA WAK

MALAYSIA

By

SOPHIA WONG WANG SZU

~hiS paper is designed to understand the job satisfaction towards employee retention

among private sector employee in Sibu Sarawak Malaysia Data was collected through

questionnaire among private company in Sibu The data were analysed by using

Statistical Package for Social Science (SPSS) version 170 for Microsoft Windows The

intrinsic job satisfaction factors have been found to be able to significantly affect the

employee retention of private company in Sibu Sarawak Malaysia

ABSTRAK

KEPUASAN KERJA KE ARAH PENYIMPANAN PEKERJA DI

KALANGAN PEKERJA SEKTOR SWASTA DI SIBU SARAWAK

MALAYSIA

Oleh

SOPHIA WONG WANG SZU

Tujuan utama kertas kerja ini adalah untuk menghubungkaitkan kepuasan pekeJja dalam

kerjaya masing-masing dengan pengekalan pekerja-pekerja di sektor swasta di Sibu

Sarawak Malaysia Data telah dikumpulkan melalui soal selidik di syarikat-syarikat

swasta di Sibu Kesemua data ini dianalisis dengan menggunakan Statistical Package for

Social Science (SPSS) versi 170 untuk Microsoft Windows Faktor-faktor intrinsik bagi

kepuasan terhadap pekerjaan didapati boleh mempengaruhi pengekatan pekerja-pekerja

di syarikat swasta di Sibu Sarawak Malaysia dengan amat ketara

ACKNOWLEDGEMENTS

First I would like to express my thankfulness to my superisor Associate Professor Dr

Lo May Chiun for her continuous invaluable assistance and leading me with her

experience throughout the entire process towards the completion of this research

Besides that the support from my parents family members and friends who give and

encourage me an opportunity to continue my CMBA from financial and physical supports

Supporting from friends cannot be ignored expecially Law Lee Muan

In addition I would like to express grateful thanks for those respondents who contribute

and help for data collections

I

Pu~at Khidmat MakJumat Akad ik UNIVERSITI MALAYSIA SARA~k

TABLE OF CONTENTS

Page

List of Tables Xll

CHAPTER ONE INTRODUCTION

ll Background

111 The Malaysian Scenario 7

12 Problem Statement 9

13 Research Objectives 12

14 Research Questions 12

15 Definition of Key Terms 13

16 Significance of Study 15

17 Scope of the Study 16

18 Organization of Chapters 16

CHAPTER TWO LITERATURE REVIEW

21 Introduction 18

22 Definition of Models 18

23 Antecedents of Job Satisfaction 20

231 Work Itself 20

23 2 Recognition 21

233 Company Policies 22

234 Supervisions 23

V III

235 Salaries 24 J

2523 6 Working Conditions

24 Consequences of Job Satisfaction 26

2624 1 Employee Retention

25 The Concept of Job Satisfaction and Employee Retention 28

2825 1 Job Satisfaction

25 2 Employee Retention 29

2926 Underlying Theory

261 HerzbergS Theory 30

262 The Job Embeddedness Model (JEM) of Tumover 30

263 Empowerment Theory 31

3227 Theoretical Framework

271 Gap in the Literature 33

272 Justification of the Theoretical Framework 33

34273 Description of Variables

274 Development of Hypothesis 34

CHAPTER THREE METHODOLOGY

3731 Introduction

3732 Research Site

3733 Research Design Sample and Procedure

3833 1 Data Collection Procedure

3934 Research Questionnaire

ix

-

F

35 Measures 40

36 Pilot Study 41

37 Statistical Analyses 42

371 Descriptive Statistic 42

372 Reliability Analysis 42

373 Correlation 43

374 Regression Analysis 44

38 Summary 44

CHAPTER FOUR RESEARCH FINDINGS

41 Introduction 45

42 Demographic Profile of Respondents 45

43 Goodness of Measures 48

44 Reliability Analysis 49

45 Descriptive Statistics 50

46 Correlation Analysis - Pearson Correlations Matrix 51

47 Regression Analysis 52

48 Hypothesis Testing 53

48l IntrinsiclMotivation Factors towards E~ployee Retention 53

482 ExtrinsicHygiene Factors towards Employee Retention 53

49 Conclusion 54

x

I

CHAPTER FIVE DISCUSSION AND CONCLUSION

51 Introduction 55

52 The Backdrop 55

53 Discussion 56

531 IntrinsiclMotivation Job Satisfaction Factors in Staff Retention 57

532 ExtrinsicHygiene Job Satisfaction Factors in Staff Retention 58

54 Implications 60

55 Potential Limitations 63

56 Directions for Future Research 64

57 Conclusion 65

REFERENCES

APPENDIX

xi

LIST OF TABLES

Pages

Table 21 Employee Satisfaction Theory (Motivation amp Hygiene) 30

Table 22 Independent Variables and Dependent Variable 32

Table 31 Total Questionnaire Distributed Collected and Unretumed 38

Questionnaire

Table 32 Interpretation of the Correlation Coefficient 43

Table 41 Frequency Profile of Respondents 47

Table 42 Reliability Analysis 49

Table 43 Descriptive Statistics 50

Table 44 Correlation Analysis - Pearson Correlations Matrix 51

Table 45 Regression Analysis 52

XII

I

The above statistic demonstrated the importance of talent pool for a company

Indeed proper talent management approach especially those skilled labours are able

to contribute more than their low-skilled counterparts The MicKinsey Quarterly

claimed that knowledge workers can create more profit than others employees do shy

up to three times more and their work requires minimal oversight

Both intrinsic and extrinsic motivation factors can affect and enhance the job

satisfaction of the employees Halepota (2005) conceived motivations as a person

prescribed by the active participation and commitment to the achievement of results

Furthermore he added motivated concept is an abstract construct because different

strategies have different results at different times In other words the results may

change and varies from times to times as with only one strategy that can produce to

ensure guaranteed favourable outcome all the times

Employee job satisfaction has been explored and used to improve the talent turnover

for the firm According Hom and Kinicki (200 I) job satisfaction is a useful strategy

to prevent turnover rate for an employee The paper that analyzes the effect of job

satisfaction on labour turnover by gender in Switzerland revealed that job

satisfaction ~~ a very good predictor of future quits and that job satisfaction does not

influence the inclination to become non-employed It further added that the gender

as a factor does not affect job satisfactIOn (Sousa-Poza 2003)

2

Career development or advancement and on the job training have been proven to be

able to improve job satisfaction of the employees Theodossiou and Zangelidis (2009)

claimed that job satisfaction of individual employees in jobs with career prospects is

higher compared with those who are not Using the data from British 2004

Workplace Employee Relations Survey (WERS) Jones et aI (2008) found out that

training has positive association with job satisfaction which in tum can positively

affect the job performance

Reward is another key for staff job satisfaction The study on the effect of four

management commitments to service factors on employees job satisfaction and

service behaviours in Bangkok Thailand showed that rewards empowerment and

training are positively related to job satisfaction while organizational support does

not Moreover job satisfaction has significant impact on customer service behaviour

and cooperation (Tavitiyaman et aI 20 II)

In technical field working schedules recognition training and wage wiH determine

the staff job satisfaction Kharnnayev (2001) in the conference publication shy

retention of high tech employees revealed that technical employees demand for

flexible schedules the opportunity to gain respect and additional income by doing a

job weB and the opportunity to improve their job skills via dedicated learning If the

firm wants its employees to remain satisfied and productive it needs to deliver those

benefits in conjunction with a competitive salary

3

The quality of the service of the service industries can be influenced by employees

job satisfaction and commitment to the organisation The research on th6 influence

of organizational commitment and job satisfaction on service quality of customer-

contact employees in banking call centres (sample size 342 employees in four

telephone call centres of a major UK retail bank) showed that job satisfaction and

organizational commitment of employees can significantly affect the quality of the

service offered (Malhotra amp Mukherjee 2004)

In the teaching profession the teachers demanded for better wages working hours

and day-off related to the career The study on job satisfaction among school

teachers in Cyprus using a sample of 461 teachers and administrators (adapted

version of questionnaire Teacher 2000 Project) claimed that Cypriot teachers chose

this career due to the salary the working hours and the holidays associated with this

profession (Zembylas amp Papanastasiou 2005)

Supervision is another area that is being studied in order to improve the job

satisfaction of the employees The survey carried out on 927 respondents on the job

satisfaction in a stable child welfare workforce found out that supervision

experiencing difficulties with working conditions lack of external client resources

length of employment and being a supervisor can be the highest predictors of job

dissatisfaction (Strand amp Dore 2008)

4

Pusat Khidmat MakJumat Akademik UNlVERSm MALAYSIA SARAWAK

Although the hotel and tourism industry is flourishing the industry faced human

resource challenges The major challenges are employee retention human resource

shortages shortages of qualified managers and the expectations gap between

education and industry (Zhang amp Wu 2004) In short the difficulty of looking for a

suitable candidate for a duty makes staff turnover an urgent issue that needed to be

tackled

Researchers have been searching for the causes of staff turnover According to

Gustafson (2002) the five most cited internal causes of turnover were rate of pay

communication problems lack of advancement oppOltunities lack of recognition for

a job well done and conflict with management while the five most cited external

causes of turnover were better pay elsewhere increases of pay in other industries

low unemployment a strong local or regional economy and low quality of

employees overall

In the academic setting there are a number of factors that can affect the retention of

the academic staff Arulkumaran (1999) claimed that the economic standings

quantum of clinical work numeration retirement age facilities for research criteria

for promotion health care delivery system the financial system and the outlook of 01

the universities which operate differently in South-East Asian countries can

determine the recruitment and retention of academic staff

5

Company policy has been explored to determine its effect on staff retention

Although environmental factors such as local labour markets and individual

employee variables can affect labour turnover organizational factors (company

culture and values) and management behaviour (operational and control variables)

have significantly effect on staff retention rate in retail industry (Booth amp Hamer

2007)

The results from the decision trees using the sample data from a questionnaire survey

of 237 managers in Singapore showed that there is positive significantly association

between ethical culture constructs (top management support for ethical behaviour

and the association between ethical behaviour and career success within the

organization) and job satisfaction It also supp0l1ed that job satisfaction was

positively related to organizational commitment (Koh amp Boh 2004)

Improving employee job satisfaction and staff retention may be able to enhance

customer satisfaction In health care facilities the research on employee satisfaction

and employee retention as catalysts to patient satisfaction illustrated that focusing on

employee satisfaction and subsequently employee retention could be the catalysts to

patient satisfaction (Collins et aI 2008)

6

111 The Malaysian Scenario

As Malaysia strived to upgrade from a middle income nation to a high Income

country In order to achieve the targets of Wawasan 2020 her reliance on

productivity and irulOvation to drive economic growth has become even greater

Under the 10th Malaysia Plan talent management had been identified as the key to

succeed (Baharin et aI 201l)

Compared to working population China the Malaysians upheld different values in

workplace Although the tendency to quit is affected by the vvorkers key-degree

performance visibility off-job recompense and reward fairness in China the staff

turnover rate among Malaysians is influenced by the current management for

retaining talents job-coupling and equity of rewards that may impact the talents job

satisfaction and organizational commitment (Zheng et aI 2009)

It is difficult to find the proper talent that can carry out the duty properly in a firm

especially in the service industry The 2-Phase survey (169 human resource

managers from service companies) that investigated the gap between cooperate

needs and availability of skills and attributes among the talent pool of Malaysia

service found out that there was a gap between i~dustry needs and the availability of

important competencies within the pool of prospective workers The service industry

looked for those with competencies in communication information technology

customer relationship management and exhibited high motivation and career

7

commitment (Downe et ai 2012) This reiterated the importance of retaining the

skillful staff in a finn

Organizational justice as part of company policy is important in detennining the

Malaysian job satisfaction and tumover intention Based on the finding on the impact

of organizational justice on employees jobs satisfaction in Klang Valley Malaysia

the high level of employees perception towards faimess to means used to detennine

outcomes (procedural justice) and faimess of the outcomes employees receive

(distributive justice) can increase the level of employees job satisfaction

organizational commitment and reduce tumover intention (Choong et aI 20 II)

Another component of company policy - management is also essential in shaping the

job satisfaction among Malaysians The study on the job satisfaction level among

human resource employees in Malaysia by investigating employee relationship with

management compensation and benefits and working environment as independent

variables to job satisfaction demonstrated that the employee relationship with

management has greater influence on job satisfaction than the other variables

compensation and benefits and working environment (Teoh et ai 2011)

The role of supervision that can affect the job satisfaction in Malaysia cannot be

ignored The result from the study on the impact of mentoring and job satisfaction in

Malaysian SMEs revealed that career mentoring has positive relationship with all

dimensions of job satisfaction studies co-workers job itself promotions and

supervisors (Lo amp Ramayah 2011)

8

Furthennore the employers need to pay attention to the working condition as part of

the dimension of job satisfaction to retain their high perfonners The research that

uses Herzbergs motivation-hygiene theory and job satisfaction in Malaysia retail

sector at Bandar Sunway Shopping Mall Selangor indicated that working conditions

are the most significant in motivating sales personnel followed by recognition

company policy and salary (Tan amp Arona 2011)

12 Problem Statement

The study conducted by Aon Hewitts (2010) showed that the average overall

tumover rate (including voluntary and involuntary) for participating organizations is

157 percent for 2010 Furthennore the voluntary tumover rate for Malaysia has

increased from 101 in 2009 to 13 in 2010 It is hard to retain the workers with

the characteristic of job loyalty in non-manufacturing sectors as 75 of the

supervisor level will hops their jobs within a year stated by Goh (2012)

The Star Newspaper (Feb 19 2012) reported that in non-manufacturing sectors

some employsrs have to replace 75 of their executives who switch jobs within a

year According to Malaysian Employers Federation (MEF) executive director

Shamsuddin Bardan indicated that it cost an employer an average RM25 000 to

RM30 000 to replace each employee who quit The cost for it includes advertising

interview screening background checks training and medical check-up Hence

9

retaining an employee is a challenging task for an employer Private companies face

trouble if there is a shortage of employees to contribute to the companies

Malaysia is lagging behind in the war for talent even though our country has made

various efforts to retain and attract the talent in the country The Talent Roadmap

2020 launched by Prime Minister Datuk Seri Najib Razak has the following

objectives optimising Malaysian talent attracting and facilitating global talent and

building a network of top talent Lim (2012) a reporter from Sin Chiew Daily

mentioned that there used to be 200 talents (graduates on government scholarship)

returned and served in various government department but only one stayed after five

years

Since our nation gained independence our nation has experienced a tremendous

increase in our living standards We lead a comfortable life And the price to pay for

higher living standards will be higher cost of living The educated youngsters who

prefer to enjoy their lives are willing to spend the expenses on entertainments They

are different from their previous generations who would rather keep and save their

money to give better environment for their next generations

The Malaysian Trades Union Congress (MTUC) secretary-general Abdul Halim

Mansor pointed out that the rising cost of living could result in high turnover rate

among workers When their salaries cannot meet the cost of living they will start

hunting for a better-paying job Moreover the scenarios usually occur to semishy

10

skilled workers if compared with less skilled workers who work on the production

floor Therefore the turnover rate is increasing with the rise of the living cost

Engaging talented personnel is proven to be a difficult task for private employers

because heshe determines the survival and development of the company in this

competitive economic environment Each employee might have different need that

the employer should try to accommodate in order to prevent job hopping

In order words it is hard to establish staff loyalty as there are many intrinsic and

extrinsic factors that influence the individuals decision to leave a company such as

the personal factors job factors and benefits factors For instance culture

management level and the workforce environment of an organisation might be

another issue of influencing the turnover rate of a company

Lower emotional exhaustion more support from the school and higher job

satisfaction are needed to keep the music teachers in school The survey of 93 music

teachers from private music schools around Klang Valley in Malaysia indicated that

the support from the music schools high job satisfaction and low emotional

exhaustion apd pressure of teaching will likely prevent them from job hopping

(Wong amp Tay 2010)

A committed employee who has high job involvement and job satisfaction will less

likely to leave the firm The questionnaire survey conducted on 116 Information

Systems (IS) personnel working in multinational companies in Malaysia showed that

11

IS personnels job involvement and jobs satisfaction that are positively related to

organizational commitment have significant impact on their tendency to leave a job

(Teh amp Tritos 2011)

13 Research Objectives

The purposes of this study are to in context of employees working at Sibu to

examine the relationship between job satisfaction (intrinsicmotivation factors and

extrinsichygiene factors) towards employee retention Besides that the research

objective IS to investigate

(intrinsicmotivation factors and

retention

the

ext

relationship

rinsichygiene

between

factors)

job

towards

satisfaction

employee

14 Research Questions

The study is to address as the questions in context of employees working at Sibu

The first qu~stion is about What is the relationship the relationship between job

satisfaction and employee retention The second question is determined What is

the relationship between the extrinsichygiene factors and intrinsicmotivation factors

of job satisfaction and employee retention Lastly the question of What is the

most important factor in detennining the employee retention of the private sectors in

Sibu Sarawak Malaysia

12

15 Definition of Key Terms

Employee Engagement

Employee engagement- Kahn (1990) claim that utilize the commitment or

contribution of an employee self-governance by their putting their efforts skills and

knowledge towards their works physically cognitively and emotionally from the

start being employed in an organisation

Talent Turnover

Gustafson (2002) defined turnover as the ratio of the number of organizational

members who have left during the period being considered divided by the average

number of people in that organization during that period For managers it means the

entire process associated with filling a vacancy Turnover is also known as the

replacement cycle when a position is vacated each time either voluntarily or

involuntarily a new employee is hired and trained

Job Satisfaction

Job satisfaction is an attitude that individuals have about their jobs It results from

their perception of the degree to which there is good fit between the individual and

the organisation Ivancevich et aI s (1997 p 91) Job satisfaction is also described

as an emotional response towards various facets of ones job such as equitable pay

and working conditions (Kreitner Kinicki amp Buelens 1999)

13

Page 6: JOB SATISFACTION TOWARDS EMPLOYEE RETENTION … Satisfaction Towards Employee... · paper is designed to understand the job satisfaction towards employee retention among ... questionnaire

ABSTRAK

KEPUASAN KERJA KE ARAH PENYIMPANAN PEKERJA DI

KALANGAN PEKERJA SEKTOR SWASTA DI SIBU SARAWAK

MALAYSIA

Oleh

SOPHIA WONG WANG SZU

Tujuan utama kertas kerja ini adalah untuk menghubungkaitkan kepuasan pekeJja dalam

kerjaya masing-masing dengan pengekalan pekerja-pekerja di sektor swasta di Sibu

Sarawak Malaysia Data telah dikumpulkan melalui soal selidik di syarikat-syarikat

swasta di Sibu Kesemua data ini dianalisis dengan menggunakan Statistical Package for

Social Science (SPSS) versi 170 untuk Microsoft Windows Faktor-faktor intrinsik bagi

kepuasan terhadap pekerjaan didapati boleh mempengaruhi pengekatan pekerja-pekerja

di syarikat swasta di Sibu Sarawak Malaysia dengan amat ketara

ACKNOWLEDGEMENTS

First I would like to express my thankfulness to my superisor Associate Professor Dr

Lo May Chiun for her continuous invaluable assistance and leading me with her

experience throughout the entire process towards the completion of this research

Besides that the support from my parents family members and friends who give and

encourage me an opportunity to continue my CMBA from financial and physical supports

Supporting from friends cannot be ignored expecially Law Lee Muan

In addition I would like to express grateful thanks for those respondents who contribute

and help for data collections

I

Pu~at Khidmat MakJumat Akad ik UNIVERSITI MALAYSIA SARA~k

TABLE OF CONTENTS

Page

List of Tables Xll

CHAPTER ONE INTRODUCTION

ll Background

111 The Malaysian Scenario 7

12 Problem Statement 9

13 Research Objectives 12

14 Research Questions 12

15 Definition of Key Terms 13

16 Significance of Study 15

17 Scope of the Study 16

18 Organization of Chapters 16

CHAPTER TWO LITERATURE REVIEW

21 Introduction 18

22 Definition of Models 18

23 Antecedents of Job Satisfaction 20

231 Work Itself 20

23 2 Recognition 21

233 Company Policies 22

234 Supervisions 23

V III

235 Salaries 24 J

2523 6 Working Conditions

24 Consequences of Job Satisfaction 26

2624 1 Employee Retention

25 The Concept of Job Satisfaction and Employee Retention 28

2825 1 Job Satisfaction

25 2 Employee Retention 29

2926 Underlying Theory

261 HerzbergS Theory 30

262 The Job Embeddedness Model (JEM) of Tumover 30

263 Empowerment Theory 31

3227 Theoretical Framework

271 Gap in the Literature 33

272 Justification of the Theoretical Framework 33

34273 Description of Variables

274 Development of Hypothesis 34

CHAPTER THREE METHODOLOGY

3731 Introduction

3732 Research Site

3733 Research Design Sample and Procedure

3833 1 Data Collection Procedure

3934 Research Questionnaire

ix

-

F

35 Measures 40

36 Pilot Study 41

37 Statistical Analyses 42

371 Descriptive Statistic 42

372 Reliability Analysis 42

373 Correlation 43

374 Regression Analysis 44

38 Summary 44

CHAPTER FOUR RESEARCH FINDINGS

41 Introduction 45

42 Demographic Profile of Respondents 45

43 Goodness of Measures 48

44 Reliability Analysis 49

45 Descriptive Statistics 50

46 Correlation Analysis - Pearson Correlations Matrix 51

47 Regression Analysis 52

48 Hypothesis Testing 53

48l IntrinsiclMotivation Factors towards E~ployee Retention 53

482 ExtrinsicHygiene Factors towards Employee Retention 53

49 Conclusion 54

x

I

CHAPTER FIVE DISCUSSION AND CONCLUSION

51 Introduction 55

52 The Backdrop 55

53 Discussion 56

531 IntrinsiclMotivation Job Satisfaction Factors in Staff Retention 57

532 ExtrinsicHygiene Job Satisfaction Factors in Staff Retention 58

54 Implications 60

55 Potential Limitations 63

56 Directions for Future Research 64

57 Conclusion 65

REFERENCES

APPENDIX

xi

LIST OF TABLES

Pages

Table 21 Employee Satisfaction Theory (Motivation amp Hygiene) 30

Table 22 Independent Variables and Dependent Variable 32

Table 31 Total Questionnaire Distributed Collected and Unretumed 38

Questionnaire

Table 32 Interpretation of the Correlation Coefficient 43

Table 41 Frequency Profile of Respondents 47

Table 42 Reliability Analysis 49

Table 43 Descriptive Statistics 50

Table 44 Correlation Analysis - Pearson Correlations Matrix 51

Table 45 Regression Analysis 52

XII

I

The above statistic demonstrated the importance of talent pool for a company

Indeed proper talent management approach especially those skilled labours are able

to contribute more than their low-skilled counterparts The MicKinsey Quarterly

claimed that knowledge workers can create more profit than others employees do shy

up to three times more and their work requires minimal oversight

Both intrinsic and extrinsic motivation factors can affect and enhance the job

satisfaction of the employees Halepota (2005) conceived motivations as a person

prescribed by the active participation and commitment to the achievement of results

Furthermore he added motivated concept is an abstract construct because different

strategies have different results at different times In other words the results may

change and varies from times to times as with only one strategy that can produce to

ensure guaranteed favourable outcome all the times

Employee job satisfaction has been explored and used to improve the talent turnover

for the firm According Hom and Kinicki (200 I) job satisfaction is a useful strategy

to prevent turnover rate for an employee The paper that analyzes the effect of job

satisfaction on labour turnover by gender in Switzerland revealed that job

satisfaction ~~ a very good predictor of future quits and that job satisfaction does not

influence the inclination to become non-employed It further added that the gender

as a factor does not affect job satisfactIOn (Sousa-Poza 2003)

2

Career development or advancement and on the job training have been proven to be

able to improve job satisfaction of the employees Theodossiou and Zangelidis (2009)

claimed that job satisfaction of individual employees in jobs with career prospects is

higher compared with those who are not Using the data from British 2004

Workplace Employee Relations Survey (WERS) Jones et aI (2008) found out that

training has positive association with job satisfaction which in tum can positively

affect the job performance

Reward is another key for staff job satisfaction The study on the effect of four

management commitments to service factors on employees job satisfaction and

service behaviours in Bangkok Thailand showed that rewards empowerment and

training are positively related to job satisfaction while organizational support does

not Moreover job satisfaction has significant impact on customer service behaviour

and cooperation (Tavitiyaman et aI 20 II)

In technical field working schedules recognition training and wage wiH determine

the staff job satisfaction Kharnnayev (2001) in the conference publication shy

retention of high tech employees revealed that technical employees demand for

flexible schedules the opportunity to gain respect and additional income by doing a

job weB and the opportunity to improve their job skills via dedicated learning If the

firm wants its employees to remain satisfied and productive it needs to deliver those

benefits in conjunction with a competitive salary

3

The quality of the service of the service industries can be influenced by employees

job satisfaction and commitment to the organisation The research on th6 influence

of organizational commitment and job satisfaction on service quality of customer-

contact employees in banking call centres (sample size 342 employees in four

telephone call centres of a major UK retail bank) showed that job satisfaction and

organizational commitment of employees can significantly affect the quality of the

service offered (Malhotra amp Mukherjee 2004)

In the teaching profession the teachers demanded for better wages working hours

and day-off related to the career The study on job satisfaction among school

teachers in Cyprus using a sample of 461 teachers and administrators (adapted

version of questionnaire Teacher 2000 Project) claimed that Cypriot teachers chose

this career due to the salary the working hours and the holidays associated with this

profession (Zembylas amp Papanastasiou 2005)

Supervision is another area that is being studied in order to improve the job

satisfaction of the employees The survey carried out on 927 respondents on the job

satisfaction in a stable child welfare workforce found out that supervision

experiencing difficulties with working conditions lack of external client resources

length of employment and being a supervisor can be the highest predictors of job

dissatisfaction (Strand amp Dore 2008)

4

Pusat Khidmat MakJumat Akademik UNlVERSm MALAYSIA SARAWAK

Although the hotel and tourism industry is flourishing the industry faced human

resource challenges The major challenges are employee retention human resource

shortages shortages of qualified managers and the expectations gap between

education and industry (Zhang amp Wu 2004) In short the difficulty of looking for a

suitable candidate for a duty makes staff turnover an urgent issue that needed to be

tackled

Researchers have been searching for the causes of staff turnover According to

Gustafson (2002) the five most cited internal causes of turnover were rate of pay

communication problems lack of advancement oppOltunities lack of recognition for

a job well done and conflict with management while the five most cited external

causes of turnover were better pay elsewhere increases of pay in other industries

low unemployment a strong local or regional economy and low quality of

employees overall

In the academic setting there are a number of factors that can affect the retention of

the academic staff Arulkumaran (1999) claimed that the economic standings

quantum of clinical work numeration retirement age facilities for research criteria

for promotion health care delivery system the financial system and the outlook of 01

the universities which operate differently in South-East Asian countries can

determine the recruitment and retention of academic staff

5

Company policy has been explored to determine its effect on staff retention

Although environmental factors such as local labour markets and individual

employee variables can affect labour turnover organizational factors (company

culture and values) and management behaviour (operational and control variables)

have significantly effect on staff retention rate in retail industry (Booth amp Hamer

2007)

The results from the decision trees using the sample data from a questionnaire survey

of 237 managers in Singapore showed that there is positive significantly association

between ethical culture constructs (top management support for ethical behaviour

and the association between ethical behaviour and career success within the

organization) and job satisfaction It also supp0l1ed that job satisfaction was

positively related to organizational commitment (Koh amp Boh 2004)

Improving employee job satisfaction and staff retention may be able to enhance

customer satisfaction In health care facilities the research on employee satisfaction

and employee retention as catalysts to patient satisfaction illustrated that focusing on

employee satisfaction and subsequently employee retention could be the catalysts to

patient satisfaction (Collins et aI 2008)

6

111 The Malaysian Scenario

As Malaysia strived to upgrade from a middle income nation to a high Income

country In order to achieve the targets of Wawasan 2020 her reliance on

productivity and irulOvation to drive economic growth has become even greater

Under the 10th Malaysia Plan talent management had been identified as the key to

succeed (Baharin et aI 201l)

Compared to working population China the Malaysians upheld different values in

workplace Although the tendency to quit is affected by the vvorkers key-degree

performance visibility off-job recompense and reward fairness in China the staff

turnover rate among Malaysians is influenced by the current management for

retaining talents job-coupling and equity of rewards that may impact the talents job

satisfaction and organizational commitment (Zheng et aI 2009)

It is difficult to find the proper talent that can carry out the duty properly in a firm

especially in the service industry The 2-Phase survey (169 human resource

managers from service companies) that investigated the gap between cooperate

needs and availability of skills and attributes among the talent pool of Malaysia

service found out that there was a gap between i~dustry needs and the availability of

important competencies within the pool of prospective workers The service industry

looked for those with competencies in communication information technology

customer relationship management and exhibited high motivation and career

7

commitment (Downe et ai 2012) This reiterated the importance of retaining the

skillful staff in a finn

Organizational justice as part of company policy is important in detennining the

Malaysian job satisfaction and tumover intention Based on the finding on the impact

of organizational justice on employees jobs satisfaction in Klang Valley Malaysia

the high level of employees perception towards faimess to means used to detennine

outcomes (procedural justice) and faimess of the outcomes employees receive

(distributive justice) can increase the level of employees job satisfaction

organizational commitment and reduce tumover intention (Choong et aI 20 II)

Another component of company policy - management is also essential in shaping the

job satisfaction among Malaysians The study on the job satisfaction level among

human resource employees in Malaysia by investigating employee relationship with

management compensation and benefits and working environment as independent

variables to job satisfaction demonstrated that the employee relationship with

management has greater influence on job satisfaction than the other variables

compensation and benefits and working environment (Teoh et ai 2011)

The role of supervision that can affect the job satisfaction in Malaysia cannot be

ignored The result from the study on the impact of mentoring and job satisfaction in

Malaysian SMEs revealed that career mentoring has positive relationship with all

dimensions of job satisfaction studies co-workers job itself promotions and

supervisors (Lo amp Ramayah 2011)

8

Furthennore the employers need to pay attention to the working condition as part of

the dimension of job satisfaction to retain their high perfonners The research that

uses Herzbergs motivation-hygiene theory and job satisfaction in Malaysia retail

sector at Bandar Sunway Shopping Mall Selangor indicated that working conditions

are the most significant in motivating sales personnel followed by recognition

company policy and salary (Tan amp Arona 2011)

12 Problem Statement

The study conducted by Aon Hewitts (2010) showed that the average overall

tumover rate (including voluntary and involuntary) for participating organizations is

157 percent for 2010 Furthennore the voluntary tumover rate for Malaysia has

increased from 101 in 2009 to 13 in 2010 It is hard to retain the workers with

the characteristic of job loyalty in non-manufacturing sectors as 75 of the

supervisor level will hops their jobs within a year stated by Goh (2012)

The Star Newspaper (Feb 19 2012) reported that in non-manufacturing sectors

some employsrs have to replace 75 of their executives who switch jobs within a

year According to Malaysian Employers Federation (MEF) executive director

Shamsuddin Bardan indicated that it cost an employer an average RM25 000 to

RM30 000 to replace each employee who quit The cost for it includes advertising

interview screening background checks training and medical check-up Hence

9

retaining an employee is a challenging task for an employer Private companies face

trouble if there is a shortage of employees to contribute to the companies

Malaysia is lagging behind in the war for talent even though our country has made

various efforts to retain and attract the talent in the country The Talent Roadmap

2020 launched by Prime Minister Datuk Seri Najib Razak has the following

objectives optimising Malaysian talent attracting and facilitating global talent and

building a network of top talent Lim (2012) a reporter from Sin Chiew Daily

mentioned that there used to be 200 talents (graduates on government scholarship)

returned and served in various government department but only one stayed after five

years

Since our nation gained independence our nation has experienced a tremendous

increase in our living standards We lead a comfortable life And the price to pay for

higher living standards will be higher cost of living The educated youngsters who

prefer to enjoy their lives are willing to spend the expenses on entertainments They

are different from their previous generations who would rather keep and save their

money to give better environment for their next generations

The Malaysian Trades Union Congress (MTUC) secretary-general Abdul Halim

Mansor pointed out that the rising cost of living could result in high turnover rate

among workers When their salaries cannot meet the cost of living they will start

hunting for a better-paying job Moreover the scenarios usually occur to semishy

10

skilled workers if compared with less skilled workers who work on the production

floor Therefore the turnover rate is increasing with the rise of the living cost

Engaging talented personnel is proven to be a difficult task for private employers

because heshe determines the survival and development of the company in this

competitive economic environment Each employee might have different need that

the employer should try to accommodate in order to prevent job hopping

In order words it is hard to establish staff loyalty as there are many intrinsic and

extrinsic factors that influence the individuals decision to leave a company such as

the personal factors job factors and benefits factors For instance culture

management level and the workforce environment of an organisation might be

another issue of influencing the turnover rate of a company

Lower emotional exhaustion more support from the school and higher job

satisfaction are needed to keep the music teachers in school The survey of 93 music

teachers from private music schools around Klang Valley in Malaysia indicated that

the support from the music schools high job satisfaction and low emotional

exhaustion apd pressure of teaching will likely prevent them from job hopping

(Wong amp Tay 2010)

A committed employee who has high job involvement and job satisfaction will less

likely to leave the firm The questionnaire survey conducted on 116 Information

Systems (IS) personnel working in multinational companies in Malaysia showed that

11

IS personnels job involvement and jobs satisfaction that are positively related to

organizational commitment have significant impact on their tendency to leave a job

(Teh amp Tritos 2011)

13 Research Objectives

The purposes of this study are to in context of employees working at Sibu to

examine the relationship between job satisfaction (intrinsicmotivation factors and

extrinsichygiene factors) towards employee retention Besides that the research

objective IS to investigate

(intrinsicmotivation factors and

retention

the

ext

relationship

rinsichygiene

between

factors)

job

towards

satisfaction

employee

14 Research Questions

The study is to address as the questions in context of employees working at Sibu

The first qu~stion is about What is the relationship the relationship between job

satisfaction and employee retention The second question is determined What is

the relationship between the extrinsichygiene factors and intrinsicmotivation factors

of job satisfaction and employee retention Lastly the question of What is the

most important factor in detennining the employee retention of the private sectors in

Sibu Sarawak Malaysia

12

15 Definition of Key Terms

Employee Engagement

Employee engagement- Kahn (1990) claim that utilize the commitment or

contribution of an employee self-governance by their putting their efforts skills and

knowledge towards their works physically cognitively and emotionally from the

start being employed in an organisation

Talent Turnover

Gustafson (2002) defined turnover as the ratio of the number of organizational

members who have left during the period being considered divided by the average

number of people in that organization during that period For managers it means the

entire process associated with filling a vacancy Turnover is also known as the

replacement cycle when a position is vacated each time either voluntarily or

involuntarily a new employee is hired and trained

Job Satisfaction

Job satisfaction is an attitude that individuals have about their jobs It results from

their perception of the degree to which there is good fit between the individual and

the organisation Ivancevich et aI s (1997 p 91) Job satisfaction is also described

as an emotional response towards various facets of ones job such as equitable pay

and working conditions (Kreitner Kinicki amp Buelens 1999)

13

Page 7: JOB SATISFACTION TOWARDS EMPLOYEE RETENTION … Satisfaction Towards Employee... · paper is designed to understand the job satisfaction towards employee retention among ... questionnaire

ACKNOWLEDGEMENTS

First I would like to express my thankfulness to my superisor Associate Professor Dr

Lo May Chiun for her continuous invaluable assistance and leading me with her

experience throughout the entire process towards the completion of this research

Besides that the support from my parents family members and friends who give and

encourage me an opportunity to continue my CMBA from financial and physical supports

Supporting from friends cannot be ignored expecially Law Lee Muan

In addition I would like to express grateful thanks for those respondents who contribute

and help for data collections

I

Pu~at Khidmat MakJumat Akad ik UNIVERSITI MALAYSIA SARA~k

TABLE OF CONTENTS

Page

List of Tables Xll

CHAPTER ONE INTRODUCTION

ll Background

111 The Malaysian Scenario 7

12 Problem Statement 9

13 Research Objectives 12

14 Research Questions 12

15 Definition of Key Terms 13

16 Significance of Study 15

17 Scope of the Study 16

18 Organization of Chapters 16

CHAPTER TWO LITERATURE REVIEW

21 Introduction 18

22 Definition of Models 18

23 Antecedents of Job Satisfaction 20

231 Work Itself 20

23 2 Recognition 21

233 Company Policies 22

234 Supervisions 23

V III

235 Salaries 24 J

2523 6 Working Conditions

24 Consequences of Job Satisfaction 26

2624 1 Employee Retention

25 The Concept of Job Satisfaction and Employee Retention 28

2825 1 Job Satisfaction

25 2 Employee Retention 29

2926 Underlying Theory

261 HerzbergS Theory 30

262 The Job Embeddedness Model (JEM) of Tumover 30

263 Empowerment Theory 31

3227 Theoretical Framework

271 Gap in the Literature 33

272 Justification of the Theoretical Framework 33

34273 Description of Variables

274 Development of Hypothesis 34

CHAPTER THREE METHODOLOGY

3731 Introduction

3732 Research Site

3733 Research Design Sample and Procedure

3833 1 Data Collection Procedure

3934 Research Questionnaire

ix

-

F

35 Measures 40

36 Pilot Study 41

37 Statistical Analyses 42

371 Descriptive Statistic 42

372 Reliability Analysis 42

373 Correlation 43

374 Regression Analysis 44

38 Summary 44

CHAPTER FOUR RESEARCH FINDINGS

41 Introduction 45

42 Demographic Profile of Respondents 45

43 Goodness of Measures 48

44 Reliability Analysis 49

45 Descriptive Statistics 50

46 Correlation Analysis - Pearson Correlations Matrix 51

47 Regression Analysis 52

48 Hypothesis Testing 53

48l IntrinsiclMotivation Factors towards E~ployee Retention 53

482 ExtrinsicHygiene Factors towards Employee Retention 53

49 Conclusion 54

x

I

CHAPTER FIVE DISCUSSION AND CONCLUSION

51 Introduction 55

52 The Backdrop 55

53 Discussion 56

531 IntrinsiclMotivation Job Satisfaction Factors in Staff Retention 57

532 ExtrinsicHygiene Job Satisfaction Factors in Staff Retention 58

54 Implications 60

55 Potential Limitations 63

56 Directions for Future Research 64

57 Conclusion 65

REFERENCES

APPENDIX

xi

LIST OF TABLES

Pages

Table 21 Employee Satisfaction Theory (Motivation amp Hygiene) 30

Table 22 Independent Variables and Dependent Variable 32

Table 31 Total Questionnaire Distributed Collected and Unretumed 38

Questionnaire

Table 32 Interpretation of the Correlation Coefficient 43

Table 41 Frequency Profile of Respondents 47

Table 42 Reliability Analysis 49

Table 43 Descriptive Statistics 50

Table 44 Correlation Analysis - Pearson Correlations Matrix 51

Table 45 Regression Analysis 52

XII

I

The above statistic demonstrated the importance of talent pool for a company

Indeed proper talent management approach especially those skilled labours are able

to contribute more than their low-skilled counterparts The MicKinsey Quarterly

claimed that knowledge workers can create more profit than others employees do shy

up to three times more and their work requires minimal oversight

Both intrinsic and extrinsic motivation factors can affect and enhance the job

satisfaction of the employees Halepota (2005) conceived motivations as a person

prescribed by the active participation and commitment to the achievement of results

Furthermore he added motivated concept is an abstract construct because different

strategies have different results at different times In other words the results may

change and varies from times to times as with only one strategy that can produce to

ensure guaranteed favourable outcome all the times

Employee job satisfaction has been explored and used to improve the talent turnover

for the firm According Hom and Kinicki (200 I) job satisfaction is a useful strategy

to prevent turnover rate for an employee The paper that analyzes the effect of job

satisfaction on labour turnover by gender in Switzerland revealed that job

satisfaction ~~ a very good predictor of future quits and that job satisfaction does not

influence the inclination to become non-employed It further added that the gender

as a factor does not affect job satisfactIOn (Sousa-Poza 2003)

2

Career development or advancement and on the job training have been proven to be

able to improve job satisfaction of the employees Theodossiou and Zangelidis (2009)

claimed that job satisfaction of individual employees in jobs with career prospects is

higher compared with those who are not Using the data from British 2004

Workplace Employee Relations Survey (WERS) Jones et aI (2008) found out that

training has positive association with job satisfaction which in tum can positively

affect the job performance

Reward is another key for staff job satisfaction The study on the effect of four

management commitments to service factors on employees job satisfaction and

service behaviours in Bangkok Thailand showed that rewards empowerment and

training are positively related to job satisfaction while organizational support does

not Moreover job satisfaction has significant impact on customer service behaviour

and cooperation (Tavitiyaman et aI 20 II)

In technical field working schedules recognition training and wage wiH determine

the staff job satisfaction Kharnnayev (2001) in the conference publication shy

retention of high tech employees revealed that technical employees demand for

flexible schedules the opportunity to gain respect and additional income by doing a

job weB and the opportunity to improve their job skills via dedicated learning If the

firm wants its employees to remain satisfied and productive it needs to deliver those

benefits in conjunction with a competitive salary

3

The quality of the service of the service industries can be influenced by employees

job satisfaction and commitment to the organisation The research on th6 influence

of organizational commitment and job satisfaction on service quality of customer-

contact employees in banking call centres (sample size 342 employees in four

telephone call centres of a major UK retail bank) showed that job satisfaction and

organizational commitment of employees can significantly affect the quality of the

service offered (Malhotra amp Mukherjee 2004)

In the teaching profession the teachers demanded for better wages working hours

and day-off related to the career The study on job satisfaction among school

teachers in Cyprus using a sample of 461 teachers and administrators (adapted

version of questionnaire Teacher 2000 Project) claimed that Cypriot teachers chose

this career due to the salary the working hours and the holidays associated with this

profession (Zembylas amp Papanastasiou 2005)

Supervision is another area that is being studied in order to improve the job

satisfaction of the employees The survey carried out on 927 respondents on the job

satisfaction in a stable child welfare workforce found out that supervision

experiencing difficulties with working conditions lack of external client resources

length of employment and being a supervisor can be the highest predictors of job

dissatisfaction (Strand amp Dore 2008)

4

Pusat Khidmat MakJumat Akademik UNlVERSm MALAYSIA SARAWAK

Although the hotel and tourism industry is flourishing the industry faced human

resource challenges The major challenges are employee retention human resource

shortages shortages of qualified managers and the expectations gap between

education and industry (Zhang amp Wu 2004) In short the difficulty of looking for a

suitable candidate for a duty makes staff turnover an urgent issue that needed to be

tackled

Researchers have been searching for the causes of staff turnover According to

Gustafson (2002) the five most cited internal causes of turnover were rate of pay

communication problems lack of advancement oppOltunities lack of recognition for

a job well done and conflict with management while the five most cited external

causes of turnover were better pay elsewhere increases of pay in other industries

low unemployment a strong local or regional economy and low quality of

employees overall

In the academic setting there are a number of factors that can affect the retention of

the academic staff Arulkumaran (1999) claimed that the economic standings

quantum of clinical work numeration retirement age facilities for research criteria

for promotion health care delivery system the financial system and the outlook of 01

the universities which operate differently in South-East Asian countries can

determine the recruitment and retention of academic staff

5

Company policy has been explored to determine its effect on staff retention

Although environmental factors such as local labour markets and individual

employee variables can affect labour turnover organizational factors (company

culture and values) and management behaviour (operational and control variables)

have significantly effect on staff retention rate in retail industry (Booth amp Hamer

2007)

The results from the decision trees using the sample data from a questionnaire survey

of 237 managers in Singapore showed that there is positive significantly association

between ethical culture constructs (top management support for ethical behaviour

and the association between ethical behaviour and career success within the

organization) and job satisfaction It also supp0l1ed that job satisfaction was

positively related to organizational commitment (Koh amp Boh 2004)

Improving employee job satisfaction and staff retention may be able to enhance

customer satisfaction In health care facilities the research on employee satisfaction

and employee retention as catalysts to patient satisfaction illustrated that focusing on

employee satisfaction and subsequently employee retention could be the catalysts to

patient satisfaction (Collins et aI 2008)

6

111 The Malaysian Scenario

As Malaysia strived to upgrade from a middle income nation to a high Income

country In order to achieve the targets of Wawasan 2020 her reliance on

productivity and irulOvation to drive economic growth has become even greater

Under the 10th Malaysia Plan talent management had been identified as the key to

succeed (Baharin et aI 201l)

Compared to working population China the Malaysians upheld different values in

workplace Although the tendency to quit is affected by the vvorkers key-degree

performance visibility off-job recompense and reward fairness in China the staff

turnover rate among Malaysians is influenced by the current management for

retaining talents job-coupling and equity of rewards that may impact the talents job

satisfaction and organizational commitment (Zheng et aI 2009)

It is difficult to find the proper talent that can carry out the duty properly in a firm

especially in the service industry The 2-Phase survey (169 human resource

managers from service companies) that investigated the gap between cooperate

needs and availability of skills and attributes among the talent pool of Malaysia

service found out that there was a gap between i~dustry needs and the availability of

important competencies within the pool of prospective workers The service industry

looked for those with competencies in communication information technology

customer relationship management and exhibited high motivation and career

7

commitment (Downe et ai 2012) This reiterated the importance of retaining the

skillful staff in a finn

Organizational justice as part of company policy is important in detennining the

Malaysian job satisfaction and tumover intention Based on the finding on the impact

of organizational justice on employees jobs satisfaction in Klang Valley Malaysia

the high level of employees perception towards faimess to means used to detennine

outcomes (procedural justice) and faimess of the outcomes employees receive

(distributive justice) can increase the level of employees job satisfaction

organizational commitment and reduce tumover intention (Choong et aI 20 II)

Another component of company policy - management is also essential in shaping the

job satisfaction among Malaysians The study on the job satisfaction level among

human resource employees in Malaysia by investigating employee relationship with

management compensation and benefits and working environment as independent

variables to job satisfaction demonstrated that the employee relationship with

management has greater influence on job satisfaction than the other variables

compensation and benefits and working environment (Teoh et ai 2011)

The role of supervision that can affect the job satisfaction in Malaysia cannot be

ignored The result from the study on the impact of mentoring and job satisfaction in

Malaysian SMEs revealed that career mentoring has positive relationship with all

dimensions of job satisfaction studies co-workers job itself promotions and

supervisors (Lo amp Ramayah 2011)

8

Furthennore the employers need to pay attention to the working condition as part of

the dimension of job satisfaction to retain their high perfonners The research that

uses Herzbergs motivation-hygiene theory and job satisfaction in Malaysia retail

sector at Bandar Sunway Shopping Mall Selangor indicated that working conditions

are the most significant in motivating sales personnel followed by recognition

company policy and salary (Tan amp Arona 2011)

12 Problem Statement

The study conducted by Aon Hewitts (2010) showed that the average overall

tumover rate (including voluntary and involuntary) for participating organizations is

157 percent for 2010 Furthennore the voluntary tumover rate for Malaysia has

increased from 101 in 2009 to 13 in 2010 It is hard to retain the workers with

the characteristic of job loyalty in non-manufacturing sectors as 75 of the

supervisor level will hops their jobs within a year stated by Goh (2012)

The Star Newspaper (Feb 19 2012) reported that in non-manufacturing sectors

some employsrs have to replace 75 of their executives who switch jobs within a

year According to Malaysian Employers Federation (MEF) executive director

Shamsuddin Bardan indicated that it cost an employer an average RM25 000 to

RM30 000 to replace each employee who quit The cost for it includes advertising

interview screening background checks training and medical check-up Hence

9

retaining an employee is a challenging task for an employer Private companies face

trouble if there is a shortage of employees to contribute to the companies

Malaysia is lagging behind in the war for talent even though our country has made

various efforts to retain and attract the talent in the country The Talent Roadmap

2020 launched by Prime Minister Datuk Seri Najib Razak has the following

objectives optimising Malaysian talent attracting and facilitating global talent and

building a network of top talent Lim (2012) a reporter from Sin Chiew Daily

mentioned that there used to be 200 talents (graduates on government scholarship)

returned and served in various government department but only one stayed after five

years

Since our nation gained independence our nation has experienced a tremendous

increase in our living standards We lead a comfortable life And the price to pay for

higher living standards will be higher cost of living The educated youngsters who

prefer to enjoy their lives are willing to spend the expenses on entertainments They

are different from their previous generations who would rather keep and save their

money to give better environment for their next generations

The Malaysian Trades Union Congress (MTUC) secretary-general Abdul Halim

Mansor pointed out that the rising cost of living could result in high turnover rate

among workers When their salaries cannot meet the cost of living they will start

hunting for a better-paying job Moreover the scenarios usually occur to semishy

10

skilled workers if compared with less skilled workers who work on the production

floor Therefore the turnover rate is increasing with the rise of the living cost

Engaging talented personnel is proven to be a difficult task for private employers

because heshe determines the survival and development of the company in this

competitive economic environment Each employee might have different need that

the employer should try to accommodate in order to prevent job hopping

In order words it is hard to establish staff loyalty as there are many intrinsic and

extrinsic factors that influence the individuals decision to leave a company such as

the personal factors job factors and benefits factors For instance culture

management level and the workforce environment of an organisation might be

another issue of influencing the turnover rate of a company

Lower emotional exhaustion more support from the school and higher job

satisfaction are needed to keep the music teachers in school The survey of 93 music

teachers from private music schools around Klang Valley in Malaysia indicated that

the support from the music schools high job satisfaction and low emotional

exhaustion apd pressure of teaching will likely prevent them from job hopping

(Wong amp Tay 2010)

A committed employee who has high job involvement and job satisfaction will less

likely to leave the firm The questionnaire survey conducted on 116 Information

Systems (IS) personnel working in multinational companies in Malaysia showed that

11

IS personnels job involvement and jobs satisfaction that are positively related to

organizational commitment have significant impact on their tendency to leave a job

(Teh amp Tritos 2011)

13 Research Objectives

The purposes of this study are to in context of employees working at Sibu to

examine the relationship between job satisfaction (intrinsicmotivation factors and

extrinsichygiene factors) towards employee retention Besides that the research

objective IS to investigate

(intrinsicmotivation factors and

retention

the

ext

relationship

rinsichygiene

between

factors)

job

towards

satisfaction

employee

14 Research Questions

The study is to address as the questions in context of employees working at Sibu

The first qu~stion is about What is the relationship the relationship between job

satisfaction and employee retention The second question is determined What is

the relationship between the extrinsichygiene factors and intrinsicmotivation factors

of job satisfaction and employee retention Lastly the question of What is the

most important factor in detennining the employee retention of the private sectors in

Sibu Sarawak Malaysia

12

15 Definition of Key Terms

Employee Engagement

Employee engagement- Kahn (1990) claim that utilize the commitment or

contribution of an employee self-governance by their putting their efforts skills and

knowledge towards their works physically cognitively and emotionally from the

start being employed in an organisation

Talent Turnover

Gustafson (2002) defined turnover as the ratio of the number of organizational

members who have left during the period being considered divided by the average

number of people in that organization during that period For managers it means the

entire process associated with filling a vacancy Turnover is also known as the

replacement cycle when a position is vacated each time either voluntarily or

involuntarily a new employee is hired and trained

Job Satisfaction

Job satisfaction is an attitude that individuals have about their jobs It results from

their perception of the degree to which there is good fit between the individual and

the organisation Ivancevich et aI s (1997 p 91) Job satisfaction is also described

as an emotional response towards various facets of ones job such as equitable pay

and working conditions (Kreitner Kinicki amp Buelens 1999)

13

Page 8: JOB SATISFACTION TOWARDS EMPLOYEE RETENTION … Satisfaction Towards Employee... · paper is designed to understand the job satisfaction towards employee retention among ... questionnaire

I

Pu~at Khidmat MakJumat Akad ik UNIVERSITI MALAYSIA SARA~k

TABLE OF CONTENTS

Page

List of Tables Xll

CHAPTER ONE INTRODUCTION

ll Background

111 The Malaysian Scenario 7

12 Problem Statement 9

13 Research Objectives 12

14 Research Questions 12

15 Definition of Key Terms 13

16 Significance of Study 15

17 Scope of the Study 16

18 Organization of Chapters 16

CHAPTER TWO LITERATURE REVIEW

21 Introduction 18

22 Definition of Models 18

23 Antecedents of Job Satisfaction 20

231 Work Itself 20

23 2 Recognition 21

233 Company Policies 22

234 Supervisions 23

V III

235 Salaries 24 J

2523 6 Working Conditions

24 Consequences of Job Satisfaction 26

2624 1 Employee Retention

25 The Concept of Job Satisfaction and Employee Retention 28

2825 1 Job Satisfaction

25 2 Employee Retention 29

2926 Underlying Theory

261 HerzbergS Theory 30

262 The Job Embeddedness Model (JEM) of Tumover 30

263 Empowerment Theory 31

3227 Theoretical Framework

271 Gap in the Literature 33

272 Justification of the Theoretical Framework 33

34273 Description of Variables

274 Development of Hypothesis 34

CHAPTER THREE METHODOLOGY

3731 Introduction

3732 Research Site

3733 Research Design Sample and Procedure

3833 1 Data Collection Procedure

3934 Research Questionnaire

ix

-

F

35 Measures 40

36 Pilot Study 41

37 Statistical Analyses 42

371 Descriptive Statistic 42

372 Reliability Analysis 42

373 Correlation 43

374 Regression Analysis 44

38 Summary 44

CHAPTER FOUR RESEARCH FINDINGS

41 Introduction 45

42 Demographic Profile of Respondents 45

43 Goodness of Measures 48

44 Reliability Analysis 49

45 Descriptive Statistics 50

46 Correlation Analysis - Pearson Correlations Matrix 51

47 Regression Analysis 52

48 Hypothesis Testing 53

48l IntrinsiclMotivation Factors towards E~ployee Retention 53

482 ExtrinsicHygiene Factors towards Employee Retention 53

49 Conclusion 54

x

I

CHAPTER FIVE DISCUSSION AND CONCLUSION

51 Introduction 55

52 The Backdrop 55

53 Discussion 56

531 IntrinsiclMotivation Job Satisfaction Factors in Staff Retention 57

532 ExtrinsicHygiene Job Satisfaction Factors in Staff Retention 58

54 Implications 60

55 Potential Limitations 63

56 Directions for Future Research 64

57 Conclusion 65

REFERENCES

APPENDIX

xi

LIST OF TABLES

Pages

Table 21 Employee Satisfaction Theory (Motivation amp Hygiene) 30

Table 22 Independent Variables and Dependent Variable 32

Table 31 Total Questionnaire Distributed Collected and Unretumed 38

Questionnaire

Table 32 Interpretation of the Correlation Coefficient 43

Table 41 Frequency Profile of Respondents 47

Table 42 Reliability Analysis 49

Table 43 Descriptive Statistics 50

Table 44 Correlation Analysis - Pearson Correlations Matrix 51

Table 45 Regression Analysis 52

XII

I

The above statistic demonstrated the importance of talent pool for a company

Indeed proper talent management approach especially those skilled labours are able

to contribute more than their low-skilled counterparts The MicKinsey Quarterly

claimed that knowledge workers can create more profit than others employees do shy

up to three times more and their work requires minimal oversight

Both intrinsic and extrinsic motivation factors can affect and enhance the job

satisfaction of the employees Halepota (2005) conceived motivations as a person

prescribed by the active participation and commitment to the achievement of results

Furthermore he added motivated concept is an abstract construct because different

strategies have different results at different times In other words the results may

change and varies from times to times as with only one strategy that can produce to

ensure guaranteed favourable outcome all the times

Employee job satisfaction has been explored and used to improve the talent turnover

for the firm According Hom and Kinicki (200 I) job satisfaction is a useful strategy

to prevent turnover rate for an employee The paper that analyzes the effect of job

satisfaction on labour turnover by gender in Switzerland revealed that job

satisfaction ~~ a very good predictor of future quits and that job satisfaction does not

influence the inclination to become non-employed It further added that the gender

as a factor does not affect job satisfactIOn (Sousa-Poza 2003)

2

Career development or advancement and on the job training have been proven to be

able to improve job satisfaction of the employees Theodossiou and Zangelidis (2009)

claimed that job satisfaction of individual employees in jobs with career prospects is

higher compared with those who are not Using the data from British 2004

Workplace Employee Relations Survey (WERS) Jones et aI (2008) found out that

training has positive association with job satisfaction which in tum can positively

affect the job performance

Reward is another key for staff job satisfaction The study on the effect of four

management commitments to service factors on employees job satisfaction and

service behaviours in Bangkok Thailand showed that rewards empowerment and

training are positively related to job satisfaction while organizational support does

not Moreover job satisfaction has significant impact on customer service behaviour

and cooperation (Tavitiyaman et aI 20 II)

In technical field working schedules recognition training and wage wiH determine

the staff job satisfaction Kharnnayev (2001) in the conference publication shy

retention of high tech employees revealed that technical employees demand for

flexible schedules the opportunity to gain respect and additional income by doing a

job weB and the opportunity to improve their job skills via dedicated learning If the

firm wants its employees to remain satisfied and productive it needs to deliver those

benefits in conjunction with a competitive salary

3

The quality of the service of the service industries can be influenced by employees

job satisfaction and commitment to the organisation The research on th6 influence

of organizational commitment and job satisfaction on service quality of customer-

contact employees in banking call centres (sample size 342 employees in four

telephone call centres of a major UK retail bank) showed that job satisfaction and

organizational commitment of employees can significantly affect the quality of the

service offered (Malhotra amp Mukherjee 2004)

In the teaching profession the teachers demanded for better wages working hours

and day-off related to the career The study on job satisfaction among school

teachers in Cyprus using a sample of 461 teachers and administrators (adapted

version of questionnaire Teacher 2000 Project) claimed that Cypriot teachers chose

this career due to the salary the working hours and the holidays associated with this

profession (Zembylas amp Papanastasiou 2005)

Supervision is another area that is being studied in order to improve the job

satisfaction of the employees The survey carried out on 927 respondents on the job

satisfaction in a stable child welfare workforce found out that supervision

experiencing difficulties with working conditions lack of external client resources

length of employment and being a supervisor can be the highest predictors of job

dissatisfaction (Strand amp Dore 2008)

4

Pusat Khidmat MakJumat Akademik UNlVERSm MALAYSIA SARAWAK

Although the hotel and tourism industry is flourishing the industry faced human

resource challenges The major challenges are employee retention human resource

shortages shortages of qualified managers and the expectations gap between

education and industry (Zhang amp Wu 2004) In short the difficulty of looking for a

suitable candidate for a duty makes staff turnover an urgent issue that needed to be

tackled

Researchers have been searching for the causes of staff turnover According to

Gustafson (2002) the five most cited internal causes of turnover were rate of pay

communication problems lack of advancement oppOltunities lack of recognition for

a job well done and conflict with management while the five most cited external

causes of turnover were better pay elsewhere increases of pay in other industries

low unemployment a strong local or regional economy and low quality of

employees overall

In the academic setting there are a number of factors that can affect the retention of

the academic staff Arulkumaran (1999) claimed that the economic standings

quantum of clinical work numeration retirement age facilities for research criteria

for promotion health care delivery system the financial system and the outlook of 01

the universities which operate differently in South-East Asian countries can

determine the recruitment and retention of academic staff

5

Company policy has been explored to determine its effect on staff retention

Although environmental factors such as local labour markets and individual

employee variables can affect labour turnover organizational factors (company

culture and values) and management behaviour (operational and control variables)

have significantly effect on staff retention rate in retail industry (Booth amp Hamer

2007)

The results from the decision trees using the sample data from a questionnaire survey

of 237 managers in Singapore showed that there is positive significantly association

between ethical culture constructs (top management support for ethical behaviour

and the association between ethical behaviour and career success within the

organization) and job satisfaction It also supp0l1ed that job satisfaction was

positively related to organizational commitment (Koh amp Boh 2004)

Improving employee job satisfaction and staff retention may be able to enhance

customer satisfaction In health care facilities the research on employee satisfaction

and employee retention as catalysts to patient satisfaction illustrated that focusing on

employee satisfaction and subsequently employee retention could be the catalysts to

patient satisfaction (Collins et aI 2008)

6

111 The Malaysian Scenario

As Malaysia strived to upgrade from a middle income nation to a high Income

country In order to achieve the targets of Wawasan 2020 her reliance on

productivity and irulOvation to drive economic growth has become even greater

Under the 10th Malaysia Plan talent management had been identified as the key to

succeed (Baharin et aI 201l)

Compared to working population China the Malaysians upheld different values in

workplace Although the tendency to quit is affected by the vvorkers key-degree

performance visibility off-job recompense and reward fairness in China the staff

turnover rate among Malaysians is influenced by the current management for

retaining talents job-coupling and equity of rewards that may impact the talents job

satisfaction and organizational commitment (Zheng et aI 2009)

It is difficult to find the proper talent that can carry out the duty properly in a firm

especially in the service industry The 2-Phase survey (169 human resource

managers from service companies) that investigated the gap between cooperate

needs and availability of skills and attributes among the talent pool of Malaysia

service found out that there was a gap between i~dustry needs and the availability of

important competencies within the pool of prospective workers The service industry

looked for those with competencies in communication information technology

customer relationship management and exhibited high motivation and career

7

commitment (Downe et ai 2012) This reiterated the importance of retaining the

skillful staff in a finn

Organizational justice as part of company policy is important in detennining the

Malaysian job satisfaction and tumover intention Based on the finding on the impact

of organizational justice on employees jobs satisfaction in Klang Valley Malaysia

the high level of employees perception towards faimess to means used to detennine

outcomes (procedural justice) and faimess of the outcomes employees receive

(distributive justice) can increase the level of employees job satisfaction

organizational commitment and reduce tumover intention (Choong et aI 20 II)

Another component of company policy - management is also essential in shaping the

job satisfaction among Malaysians The study on the job satisfaction level among

human resource employees in Malaysia by investigating employee relationship with

management compensation and benefits and working environment as independent

variables to job satisfaction demonstrated that the employee relationship with

management has greater influence on job satisfaction than the other variables

compensation and benefits and working environment (Teoh et ai 2011)

The role of supervision that can affect the job satisfaction in Malaysia cannot be

ignored The result from the study on the impact of mentoring and job satisfaction in

Malaysian SMEs revealed that career mentoring has positive relationship with all

dimensions of job satisfaction studies co-workers job itself promotions and

supervisors (Lo amp Ramayah 2011)

8

Furthennore the employers need to pay attention to the working condition as part of

the dimension of job satisfaction to retain their high perfonners The research that

uses Herzbergs motivation-hygiene theory and job satisfaction in Malaysia retail

sector at Bandar Sunway Shopping Mall Selangor indicated that working conditions

are the most significant in motivating sales personnel followed by recognition

company policy and salary (Tan amp Arona 2011)

12 Problem Statement

The study conducted by Aon Hewitts (2010) showed that the average overall

tumover rate (including voluntary and involuntary) for participating organizations is

157 percent for 2010 Furthennore the voluntary tumover rate for Malaysia has

increased from 101 in 2009 to 13 in 2010 It is hard to retain the workers with

the characteristic of job loyalty in non-manufacturing sectors as 75 of the

supervisor level will hops their jobs within a year stated by Goh (2012)

The Star Newspaper (Feb 19 2012) reported that in non-manufacturing sectors

some employsrs have to replace 75 of their executives who switch jobs within a

year According to Malaysian Employers Federation (MEF) executive director

Shamsuddin Bardan indicated that it cost an employer an average RM25 000 to

RM30 000 to replace each employee who quit The cost for it includes advertising

interview screening background checks training and medical check-up Hence

9

retaining an employee is a challenging task for an employer Private companies face

trouble if there is a shortage of employees to contribute to the companies

Malaysia is lagging behind in the war for talent even though our country has made

various efforts to retain and attract the talent in the country The Talent Roadmap

2020 launched by Prime Minister Datuk Seri Najib Razak has the following

objectives optimising Malaysian talent attracting and facilitating global talent and

building a network of top talent Lim (2012) a reporter from Sin Chiew Daily

mentioned that there used to be 200 talents (graduates on government scholarship)

returned and served in various government department but only one stayed after five

years

Since our nation gained independence our nation has experienced a tremendous

increase in our living standards We lead a comfortable life And the price to pay for

higher living standards will be higher cost of living The educated youngsters who

prefer to enjoy their lives are willing to spend the expenses on entertainments They

are different from their previous generations who would rather keep and save their

money to give better environment for their next generations

The Malaysian Trades Union Congress (MTUC) secretary-general Abdul Halim

Mansor pointed out that the rising cost of living could result in high turnover rate

among workers When their salaries cannot meet the cost of living they will start

hunting for a better-paying job Moreover the scenarios usually occur to semishy

10

skilled workers if compared with less skilled workers who work on the production

floor Therefore the turnover rate is increasing with the rise of the living cost

Engaging talented personnel is proven to be a difficult task for private employers

because heshe determines the survival and development of the company in this

competitive economic environment Each employee might have different need that

the employer should try to accommodate in order to prevent job hopping

In order words it is hard to establish staff loyalty as there are many intrinsic and

extrinsic factors that influence the individuals decision to leave a company such as

the personal factors job factors and benefits factors For instance culture

management level and the workforce environment of an organisation might be

another issue of influencing the turnover rate of a company

Lower emotional exhaustion more support from the school and higher job

satisfaction are needed to keep the music teachers in school The survey of 93 music

teachers from private music schools around Klang Valley in Malaysia indicated that

the support from the music schools high job satisfaction and low emotional

exhaustion apd pressure of teaching will likely prevent them from job hopping

(Wong amp Tay 2010)

A committed employee who has high job involvement and job satisfaction will less

likely to leave the firm The questionnaire survey conducted on 116 Information

Systems (IS) personnel working in multinational companies in Malaysia showed that

11

IS personnels job involvement and jobs satisfaction that are positively related to

organizational commitment have significant impact on their tendency to leave a job

(Teh amp Tritos 2011)

13 Research Objectives

The purposes of this study are to in context of employees working at Sibu to

examine the relationship between job satisfaction (intrinsicmotivation factors and

extrinsichygiene factors) towards employee retention Besides that the research

objective IS to investigate

(intrinsicmotivation factors and

retention

the

ext

relationship

rinsichygiene

between

factors)

job

towards

satisfaction

employee

14 Research Questions

The study is to address as the questions in context of employees working at Sibu

The first qu~stion is about What is the relationship the relationship between job

satisfaction and employee retention The second question is determined What is

the relationship between the extrinsichygiene factors and intrinsicmotivation factors

of job satisfaction and employee retention Lastly the question of What is the

most important factor in detennining the employee retention of the private sectors in

Sibu Sarawak Malaysia

12

15 Definition of Key Terms

Employee Engagement

Employee engagement- Kahn (1990) claim that utilize the commitment or

contribution of an employee self-governance by their putting their efforts skills and

knowledge towards their works physically cognitively and emotionally from the

start being employed in an organisation

Talent Turnover

Gustafson (2002) defined turnover as the ratio of the number of organizational

members who have left during the period being considered divided by the average

number of people in that organization during that period For managers it means the

entire process associated with filling a vacancy Turnover is also known as the

replacement cycle when a position is vacated each time either voluntarily or

involuntarily a new employee is hired and trained

Job Satisfaction

Job satisfaction is an attitude that individuals have about their jobs It results from

their perception of the degree to which there is good fit between the individual and

the organisation Ivancevich et aI s (1997 p 91) Job satisfaction is also described

as an emotional response towards various facets of ones job such as equitable pay

and working conditions (Kreitner Kinicki amp Buelens 1999)

13

Page 9: JOB SATISFACTION TOWARDS EMPLOYEE RETENTION … Satisfaction Towards Employee... · paper is designed to understand the job satisfaction towards employee retention among ... questionnaire

235 Salaries 24 J

2523 6 Working Conditions

24 Consequences of Job Satisfaction 26

2624 1 Employee Retention

25 The Concept of Job Satisfaction and Employee Retention 28

2825 1 Job Satisfaction

25 2 Employee Retention 29

2926 Underlying Theory

261 HerzbergS Theory 30

262 The Job Embeddedness Model (JEM) of Tumover 30

263 Empowerment Theory 31

3227 Theoretical Framework

271 Gap in the Literature 33

272 Justification of the Theoretical Framework 33

34273 Description of Variables

274 Development of Hypothesis 34

CHAPTER THREE METHODOLOGY

3731 Introduction

3732 Research Site

3733 Research Design Sample and Procedure

3833 1 Data Collection Procedure

3934 Research Questionnaire

ix

-

F

35 Measures 40

36 Pilot Study 41

37 Statistical Analyses 42

371 Descriptive Statistic 42

372 Reliability Analysis 42

373 Correlation 43

374 Regression Analysis 44

38 Summary 44

CHAPTER FOUR RESEARCH FINDINGS

41 Introduction 45

42 Demographic Profile of Respondents 45

43 Goodness of Measures 48

44 Reliability Analysis 49

45 Descriptive Statistics 50

46 Correlation Analysis - Pearson Correlations Matrix 51

47 Regression Analysis 52

48 Hypothesis Testing 53

48l IntrinsiclMotivation Factors towards E~ployee Retention 53

482 ExtrinsicHygiene Factors towards Employee Retention 53

49 Conclusion 54

x

I

CHAPTER FIVE DISCUSSION AND CONCLUSION

51 Introduction 55

52 The Backdrop 55

53 Discussion 56

531 IntrinsiclMotivation Job Satisfaction Factors in Staff Retention 57

532 ExtrinsicHygiene Job Satisfaction Factors in Staff Retention 58

54 Implications 60

55 Potential Limitations 63

56 Directions for Future Research 64

57 Conclusion 65

REFERENCES

APPENDIX

xi

LIST OF TABLES

Pages

Table 21 Employee Satisfaction Theory (Motivation amp Hygiene) 30

Table 22 Independent Variables and Dependent Variable 32

Table 31 Total Questionnaire Distributed Collected and Unretumed 38

Questionnaire

Table 32 Interpretation of the Correlation Coefficient 43

Table 41 Frequency Profile of Respondents 47

Table 42 Reliability Analysis 49

Table 43 Descriptive Statistics 50

Table 44 Correlation Analysis - Pearson Correlations Matrix 51

Table 45 Regression Analysis 52

XII

I

The above statistic demonstrated the importance of talent pool for a company

Indeed proper talent management approach especially those skilled labours are able

to contribute more than their low-skilled counterparts The MicKinsey Quarterly

claimed that knowledge workers can create more profit than others employees do shy

up to three times more and their work requires minimal oversight

Both intrinsic and extrinsic motivation factors can affect and enhance the job

satisfaction of the employees Halepota (2005) conceived motivations as a person

prescribed by the active participation and commitment to the achievement of results

Furthermore he added motivated concept is an abstract construct because different

strategies have different results at different times In other words the results may

change and varies from times to times as with only one strategy that can produce to

ensure guaranteed favourable outcome all the times

Employee job satisfaction has been explored and used to improve the talent turnover

for the firm According Hom and Kinicki (200 I) job satisfaction is a useful strategy

to prevent turnover rate for an employee The paper that analyzes the effect of job

satisfaction on labour turnover by gender in Switzerland revealed that job

satisfaction ~~ a very good predictor of future quits and that job satisfaction does not

influence the inclination to become non-employed It further added that the gender

as a factor does not affect job satisfactIOn (Sousa-Poza 2003)

2

Career development or advancement and on the job training have been proven to be

able to improve job satisfaction of the employees Theodossiou and Zangelidis (2009)

claimed that job satisfaction of individual employees in jobs with career prospects is

higher compared with those who are not Using the data from British 2004

Workplace Employee Relations Survey (WERS) Jones et aI (2008) found out that

training has positive association with job satisfaction which in tum can positively

affect the job performance

Reward is another key for staff job satisfaction The study on the effect of four

management commitments to service factors on employees job satisfaction and

service behaviours in Bangkok Thailand showed that rewards empowerment and

training are positively related to job satisfaction while organizational support does

not Moreover job satisfaction has significant impact on customer service behaviour

and cooperation (Tavitiyaman et aI 20 II)

In technical field working schedules recognition training and wage wiH determine

the staff job satisfaction Kharnnayev (2001) in the conference publication shy

retention of high tech employees revealed that technical employees demand for

flexible schedules the opportunity to gain respect and additional income by doing a

job weB and the opportunity to improve their job skills via dedicated learning If the

firm wants its employees to remain satisfied and productive it needs to deliver those

benefits in conjunction with a competitive salary

3

The quality of the service of the service industries can be influenced by employees

job satisfaction and commitment to the organisation The research on th6 influence

of organizational commitment and job satisfaction on service quality of customer-

contact employees in banking call centres (sample size 342 employees in four

telephone call centres of a major UK retail bank) showed that job satisfaction and

organizational commitment of employees can significantly affect the quality of the

service offered (Malhotra amp Mukherjee 2004)

In the teaching profession the teachers demanded for better wages working hours

and day-off related to the career The study on job satisfaction among school

teachers in Cyprus using a sample of 461 teachers and administrators (adapted

version of questionnaire Teacher 2000 Project) claimed that Cypriot teachers chose

this career due to the salary the working hours and the holidays associated with this

profession (Zembylas amp Papanastasiou 2005)

Supervision is another area that is being studied in order to improve the job

satisfaction of the employees The survey carried out on 927 respondents on the job

satisfaction in a stable child welfare workforce found out that supervision

experiencing difficulties with working conditions lack of external client resources

length of employment and being a supervisor can be the highest predictors of job

dissatisfaction (Strand amp Dore 2008)

4

Pusat Khidmat MakJumat Akademik UNlVERSm MALAYSIA SARAWAK

Although the hotel and tourism industry is flourishing the industry faced human

resource challenges The major challenges are employee retention human resource

shortages shortages of qualified managers and the expectations gap between

education and industry (Zhang amp Wu 2004) In short the difficulty of looking for a

suitable candidate for a duty makes staff turnover an urgent issue that needed to be

tackled

Researchers have been searching for the causes of staff turnover According to

Gustafson (2002) the five most cited internal causes of turnover were rate of pay

communication problems lack of advancement oppOltunities lack of recognition for

a job well done and conflict with management while the five most cited external

causes of turnover were better pay elsewhere increases of pay in other industries

low unemployment a strong local or regional economy and low quality of

employees overall

In the academic setting there are a number of factors that can affect the retention of

the academic staff Arulkumaran (1999) claimed that the economic standings

quantum of clinical work numeration retirement age facilities for research criteria

for promotion health care delivery system the financial system and the outlook of 01

the universities which operate differently in South-East Asian countries can

determine the recruitment and retention of academic staff

5

Company policy has been explored to determine its effect on staff retention

Although environmental factors such as local labour markets and individual

employee variables can affect labour turnover organizational factors (company

culture and values) and management behaviour (operational and control variables)

have significantly effect on staff retention rate in retail industry (Booth amp Hamer

2007)

The results from the decision trees using the sample data from a questionnaire survey

of 237 managers in Singapore showed that there is positive significantly association

between ethical culture constructs (top management support for ethical behaviour

and the association between ethical behaviour and career success within the

organization) and job satisfaction It also supp0l1ed that job satisfaction was

positively related to organizational commitment (Koh amp Boh 2004)

Improving employee job satisfaction and staff retention may be able to enhance

customer satisfaction In health care facilities the research on employee satisfaction

and employee retention as catalysts to patient satisfaction illustrated that focusing on

employee satisfaction and subsequently employee retention could be the catalysts to

patient satisfaction (Collins et aI 2008)

6

111 The Malaysian Scenario

As Malaysia strived to upgrade from a middle income nation to a high Income

country In order to achieve the targets of Wawasan 2020 her reliance on

productivity and irulOvation to drive economic growth has become even greater

Under the 10th Malaysia Plan talent management had been identified as the key to

succeed (Baharin et aI 201l)

Compared to working population China the Malaysians upheld different values in

workplace Although the tendency to quit is affected by the vvorkers key-degree

performance visibility off-job recompense and reward fairness in China the staff

turnover rate among Malaysians is influenced by the current management for

retaining talents job-coupling and equity of rewards that may impact the talents job

satisfaction and organizational commitment (Zheng et aI 2009)

It is difficult to find the proper talent that can carry out the duty properly in a firm

especially in the service industry The 2-Phase survey (169 human resource

managers from service companies) that investigated the gap between cooperate

needs and availability of skills and attributes among the talent pool of Malaysia

service found out that there was a gap between i~dustry needs and the availability of

important competencies within the pool of prospective workers The service industry

looked for those with competencies in communication information technology

customer relationship management and exhibited high motivation and career

7

commitment (Downe et ai 2012) This reiterated the importance of retaining the

skillful staff in a finn

Organizational justice as part of company policy is important in detennining the

Malaysian job satisfaction and tumover intention Based on the finding on the impact

of organizational justice on employees jobs satisfaction in Klang Valley Malaysia

the high level of employees perception towards faimess to means used to detennine

outcomes (procedural justice) and faimess of the outcomes employees receive

(distributive justice) can increase the level of employees job satisfaction

organizational commitment and reduce tumover intention (Choong et aI 20 II)

Another component of company policy - management is also essential in shaping the

job satisfaction among Malaysians The study on the job satisfaction level among

human resource employees in Malaysia by investigating employee relationship with

management compensation and benefits and working environment as independent

variables to job satisfaction demonstrated that the employee relationship with

management has greater influence on job satisfaction than the other variables

compensation and benefits and working environment (Teoh et ai 2011)

The role of supervision that can affect the job satisfaction in Malaysia cannot be

ignored The result from the study on the impact of mentoring and job satisfaction in

Malaysian SMEs revealed that career mentoring has positive relationship with all

dimensions of job satisfaction studies co-workers job itself promotions and

supervisors (Lo amp Ramayah 2011)

8

Furthennore the employers need to pay attention to the working condition as part of

the dimension of job satisfaction to retain their high perfonners The research that

uses Herzbergs motivation-hygiene theory and job satisfaction in Malaysia retail

sector at Bandar Sunway Shopping Mall Selangor indicated that working conditions

are the most significant in motivating sales personnel followed by recognition

company policy and salary (Tan amp Arona 2011)

12 Problem Statement

The study conducted by Aon Hewitts (2010) showed that the average overall

tumover rate (including voluntary and involuntary) for participating organizations is

157 percent for 2010 Furthennore the voluntary tumover rate for Malaysia has

increased from 101 in 2009 to 13 in 2010 It is hard to retain the workers with

the characteristic of job loyalty in non-manufacturing sectors as 75 of the

supervisor level will hops their jobs within a year stated by Goh (2012)

The Star Newspaper (Feb 19 2012) reported that in non-manufacturing sectors

some employsrs have to replace 75 of their executives who switch jobs within a

year According to Malaysian Employers Federation (MEF) executive director

Shamsuddin Bardan indicated that it cost an employer an average RM25 000 to

RM30 000 to replace each employee who quit The cost for it includes advertising

interview screening background checks training and medical check-up Hence

9

retaining an employee is a challenging task for an employer Private companies face

trouble if there is a shortage of employees to contribute to the companies

Malaysia is lagging behind in the war for talent even though our country has made

various efforts to retain and attract the talent in the country The Talent Roadmap

2020 launched by Prime Minister Datuk Seri Najib Razak has the following

objectives optimising Malaysian talent attracting and facilitating global talent and

building a network of top talent Lim (2012) a reporter from Sin Chiew Daily

mentioned that there used to be 200 talents (graduates on government scholarship)

returned and served in various government department but only one stayed after five

years

Since our nation gained independence our nation has experienced a tremendous

increase in our living standards We lead a comfortable life And the price to pay for

higher living standards will be higher cost of living The educated youngsters who

prefer to enjoy their lives are willing to spend the expenses on entertainments They

are different from their previous generations who would rather keep and save their

money to give better environment for their next generations

The Malaysian Trades Union Congress (MTUC) secretary-general Abdul Halim

Mansor pointed out that the rising cost of living could result in high turnover rate

among workers When their salaries cannot meet the cost of living they will start

hunting for a better-paying job Moreover the scenarios usually occur to semishy

10

skilled workers if compared with less skilled workers who work on the production

floor Therefore the turnover rate is increasing with the rise of the living cost

Engaging talented personnel is proven to be a difficult task for private employers

because heshe determines the survival and development of the company in this

competitive economic environment Each employee might have different need that

the employer should try to accommodate in order to prevent job hopping

In order words it is hard to establish staff loyalty as there are many intrinsic and

extrinsic factors that influence the individuals decision to leave a company such as

the personal factors job factors and benefits factors For instance culture

management level and the workforce environment of an organisation might be

another issue of influencing the turnover rate of a company

Lower emotional exhaustion more support from the school and higher job

satisfaction are needed to keep the music teachers in school The survey of 93 music

teachers from private music schools around Klang Valley in Malaysia indicated that

the support from the music schools high job satisfaction and low emotional

exhaustion apd pressure of teaching will likely prevent them from job hopping

(Wong amp Tay 2010)

A committed employee who has high job involvement and job satisfaction will less

likely to leave the firm The questionnaire survey conducted on 116 Information

Systems (IS) personnel working in multinational companies in Malaysia showed that

11

IS personnels job involvement and jobs satisfaction that are positively related to

organizational commitment have significant impact on their tendency to leave a job

(Teh amp Tritos 2011)

13 Research Objectives

The purposes of this study are to in context of employees working at Sibu to

examine the relationship between job satisfaction (intrinsicmotivation factors and

extrinsichygiene factors) towards employee retention Besides that the research

objective IS to investigate

(intrinsicmotivation factors and

retention

the

ext

relationship

rinsichygiene

between

factors)

job

towards

satisfaction

employee

14 Research Questions

The study is to address as the questions in context of employees working at Sibu

The first qu~stion is about What is the relationship the relationship between job

satisfaction and employee retention The second question is determined What is

the relationship between the extrinsichygiene factors and intrinsicmotivation factors

of job satisfaction and employee retention Lastly the question of What is the

most important factor in detennining the employee retention of the private sectors in

Sibu Sarawak Malaysia

12

15 Definition of Key Terms

Employee Engagement

Employee engagement- Kahn (1990) claim that utilize the commitment or

contribution of an employee self-governance by their putting their efforts skills and

knowledge towards their works physically cognitively and emotionally from the

start being employed in an organisation

Talent Turnover

Gustafson (2002) defined turnover as the ratio of the number of organizational

members who have left during the period being considered divided by the average

number of people in that organization during that period For managers it means the

entire process associated with filling a vacancy Turnover is also known as the

replacement cycle when a position is vacated each time either voluntarily or

involuntarily a new employee is hired and trained

Job Satisfaction

Job satisfaction is an attitude that individuals have about their jobs It results from

their perception of the degree to which there is good fit between the individual and

the organisation Ivancevich et aI s (1997 p 91) Job satisfaction is also described

as an emotional response towards various facets of ones job such as equitable pay

and working conditions (Kreitner Kinicki amp Buelens 1999)

13

Page 10: JOB SATISFACTION TOWARDS EMPLOYEE RETENTION … Satisfaction Towards Employee... · paper is designed to understand the job satisfaction towards employee retention among ... questionnaire

F

35 Measures 40

36 Pilot Study 41

37 Statistical Analyses 42

371 Descriptive Statistic 42

372 Reliability Analysis 42

373 Correlation 43

374 Regression Analysis 44

38 Summary 44

CHAPTER FOUR RESEARCH FINDINGS

41 Introduction 45

42 Demographic Profile of Respondents 45

43 Goodness of Measures 48

44 Reliability Analysis 49

45 Descriptive Statistics 50

46 Correlation Analysis - Pearson Correlations Matrix 51

47 Regression Analysis 52

48 Hypothesis Testing 53

48l IntrinsiclMotivation Factors towards E~ployee Retention 53

482 ExtrinsicHygiene Factors towards Employee Retention 53

49 Conclusion 54

x

I

CHAPTER FIVE DISCUSSION AND CONCLUSION

51 Introduction 55

52 The Backdrop 55

53 Discussion 56

531 IntrinsiclMotivation Job Satisfaction Factors in Staff Retention 57

532 ExtrinsicHygiene Job Satisfaction Factors in Staff Retention 58

54 Implications 60

55 Potential Limitations 63

56 Directions for Future Research 64

57 Conclusion 65

REFERENCES

APPENDIX

xi

LIST OF TABLES

Pages

Table 21 Employee Satisfaction Theory (Motivation amp Hygiene) 30

Table 22 Independent Variables and Dependent Variable 32

Table 31 Total Questionnaire Distributed Collected and Unretumed 38

Questionnaire

Table 32 Interpretation of the Correlation Coefficient 43

Table 41 Frequency Profile of Respondents 47

Table 42 Reliability Analysis 49

Table 43 Descriptive Statistics 50

Table 44 Correlation Analysis - Pearson Correlations Matrix 51

Table 45 Regression Analysis 52

XII

I

The above statistic demonstrated the importance of talent pool for a company

Indeed proper talent management approach especially those skilled labours are able

to contribute more than their low-skilled counterparts The MicKinsey Quarterly

claimed that knowledge workers can create more profit than others employees do shy

up to three times more and their work requires minimal oversight

Both intrinsic and extrinsic motivation factors can affect and enhance the job

satisfaction of the employees Halepota (2005) conceived motivations as a person

prescribed by the active participation and commitment to the achievement of results

Furthermore he added motivated concept is an abstract construct because different

strategies have different results at different times In other words the results may

change and varies from times to times as with only one strategy that can produce to

ensure guaranteed favourable outcome all the times

Employee job satisfaction has been explored and used to improve the talent turnover

for the firm According Hom and Kinicki (200 I) job satisfaction is a useful strategy

to prevent turnover rate for an employee The paper that analyzes the effect of job

satisfaction on labour turnover by gender in Switzerland revealed that job

satisfaction ~~ a very good predictor of future quits and that job satisfaction does not

influence the inclination to become non-employed It further added that the gender

as a factor does not affect job satisfactIOn (Sousa-Poza 2003)

2

Career development or advancement and on the job training have been proven to be

able to improve job satisfaction of the employees Theodossiou and Zangelidis (2009)

claimed that job satisfaction of individual employees in jobs with career prospects is

higher compared with those who are not Using the data from British 2004

Workplace Employee Relations Survey (WERS) Jones et aI (2008) found out that

training has positive association with job satisfaction which in tum can positively

affect the job performance

Reward is another key for staff job satisfaction The study on the effect of four

management commitments to service factors on employees job satisfaction and

service behaviours in Bangkok Thailand showed that rewards empowerment and

training are positively related to job satisfaction while organizational support does

not Moreover job satisfaction has significant impact on customer service behaviour

and cooperation (Tavitiyaman et aI 20 II)

In technical field working schedules recognition training and wage wiH determine

the staff job satisfaction Kharnnayev (2001) in the conference publication shy

retention of high tech employees revealed that technical employees demand for

flexible schedules the opportunity to gain respect and additional income by doing a

job weB and the opportunity to improve their job skills via dedicated learning If the

firm wants its employees to remain satisfied and productive it needs to deliver those

benefits in conjunction with a competitive salary

3

The quality of the service of the service industries can be influenced by employees

job satisfaction and commitment to the organisation The research on th6 influence

of organizational commitment and job satisfaction on service quality of customer-

contact employees in banking call centres (sample size 342 employees in four

telephone call centres of a major UK retail bank) showed that job satisfaction and

organizational commitment of employees can significantly affect the quality of the

service offered (Malhotra amp Mukherjee 2004)

In the teaching profession the teachers demanded for better wages working hours

and day-off related to the career The study on job satisfaction among school

teachers in Cyprus using a sample of 461 teachers and administrators (adapted

version of questionnaire Teacher 2000 Project) claimed that Cypriot teachers chose

this career due to the salary the working hours and the holidays associated with this

profession (Zembylas amp Papanastasiou 2005)

Supervision is another area that is being studied in order to improve the job

satisfaction of the employees The survey carried out on 927 respondents on the job

satisfaction in a stable child welfare workforce found out that supervision

experiencing difficulties with working conditions lack of external client resources

length of employment and being a supervisor can be the highest predictors of job

dissatisfaction (Strand amp Dore 2008)

4

Pusat Khidmat MakJumat Akademik UNlVERSm MALAYSIA SARAWAK

Although the hotel and tourism industry is flourishing the industry faced human

resource challenges The major challenges are employee retention human resource

shortages shortages of qualified managers and the expectations gap between

education and industry (Zhang amp Wu 2004) In short the difficulty of looking for a

suitable candidate for a duty makes staff turnover an urgent issue that needed to be

tackled

Researchers have been searching for the causes of staff turnover According to

Gustafson (2002) the five most cited internal causes of turnover were rate of pay

communication problems lack of advancement oppOltunities lack of recognition for

a job well done and conflict with management while the five most cited external

causes of turnover were better pay elsewhere increases of pay in other industries

low unemployment a strong local or regional economy and low quality of

employees overall

In the academic setting there are a number of factors that can affect the retention of

the academic staff Arulkumaran (1999) claimed that the economic standings

quantum of clinical work numeration retirement age facilities for research criteria

for promotion health care delivery system the financial system and the outlook of 01

the universities which operate differently in South-East Asian countries can

determine the recruitment and retention of academic staff

5

Company policy has been explored to determine its effect on staff retention

Although environmental factors such as local labour markets and individual

employee variables can affect labour turnover organizational factors (company

culture and values) and management behaviour (operational and control variables)

have significantly effect on staff retention rate in retail industry (Booth amp Hamer

2007)

The results from the decision trees using the sample data from a questionnaire survey

of 237 managers in Singapore showed that there is positive significantly association

between ethical culture constructs (top management support for ethical behaviour

and the association between ethical behaviour and career success within the

organization) and job satisfaction It also supp0l1ed that job satisfaction was

positively related to organizational commitment (Koh amp Boh 2004)

Improving employee job satisfaction and staff retention may be able to enhance

customer satisfaction In health care facilities the research on employee satisfaction

and employee retention as catalysts to patient satisfaction illustrated that focusing on

employee satisfaction and subsequently employee retention could be the catalysts to

patient satisfaction (Collins et aI 2008)

6

111 The Malaysian Scenario

As Malaysia strived to upgrade from a middle income nation to a high Income

country In order to achieve the targets of Wawasan 2020 her reliance on

productivity and irulOvation to drive economic growth has become even greater

Under the 10th Malaysia Plan talent management had been identified as the key to

succeed (Baharin et aI 201l)

Compared to working population China the Malaysians upheld different values in

workplace Although the tendency to quit is affected by the vvorkers key-degree

performance visibility off-job recompense and reward fairness in China the staff

turnover rate among Malaysians is influenced by the current management for

retaining talents job-coupling and equity of rewards that may impact the talents job

satisfaction and organizational commitment (Zheng et aI 2009)

It is difficult to find the proper talent that can carry out the duty properly in a firm

especially in the service industry The 2-Phase survey (169 human resource

managers from service companies) that investigated the gap between cooperate

needs and availability of skills and attributes among the talent pool of Malaysia

service found out that there was a gap between i~dustry needs and the availability of

important competencies within the pool of prospective workers The service industry

looked for those with competencies in communication information technology

customer relationship management and exhibited high motivation and career

7

commitment (Downe et ai 2012) This reiterated the importance of retaining the

skillful staff in a finn

Organizational justice as part of company policy is important in detennining the

Malaysian job satisfaction and tumover intention Based on the finding on the impact

of organizational justice on employees jobs satisfaction in Klang Valley Malaysia

the high level of employees perception towards faimess to means used to detennine

outcomes (procedural justice) and faimess of the outcomes employees receive

(distributive justice) can increase the level of employees job satisfaction

organizational commitment and reduce tumover intention (Choong et aI 20 II)

Another component of company policy - management is also essential in shaping the

job satisfaction among Malaysians The study on the job satisfaction level among

human resource employees in Malaysia by investigating employee relationship with

management compensation and benefits and working environment as independent

variables to job satisfaction demonstrated that the employee relationship with

management has greater influence on job satisfaction than the other variables

compensation and benefits and working environment (Teoh et ai 2011)

The role of supervision that can affect the job satisfaction in Malaysia cannot be

ignored The result from the study on the impact of mentoring and job satisfaction in

Malaysian SMEs revealed that career mentoring has positive relationship with all

dimensions of job satisfaction studies co-workers job itself promotions and

supervisors (Lo amp Ramayah 2011)

8

Furthennore the employers need to pay attention to the working condition as part of

the dimension of job satisfaction to retain their high perfonners The research that

uses Herzbergs motivation-hygiene theory and job satisfaction in Malaysia retail

sector at Bandar Sunway Shopping Mall Selangor indicated that working conditions

are the most significant in motivating sales personnel followed by recognition

company policy and salary (Tan amp Arona 2011)

12 Problem Statement

The study conducted by Aon Hewitts (2010) showed that the average overall

tumover rate (including voluntary and involuntary) for participating organizations is

157 percent for 2010 Furthennore the voluntary tumover rate for Malaysia has

increased from 101 in 2009 to 13 in 2010 It is hard to retain the workers with

the characteristic of job loyalty in non-manufacturing sectors as 75 of the

supervisor level will hops their jobs within a year stated by Goh (2012)

The Star Newspaper (Feb 19 2012) reported that in non-manufacturing sectors

some employsrs have to replace 75 of their executives who switch jobs within a

year According to Malaysian Employers Federation (MEF) executive director

Shamsuddin Bardan indicated that it cost an employer an average RM25 000 to

RM30 000 to replace each employee who quit The cost for it includes advertising

interview screening background checks training and medical check-up Hence

9

retaining an employee is a challenging task for an employer Private companies face

trouble if there is a shortage of employees to contribute to the companies

Malaysia is lagging behind in the war for talent even though our country has made

various efforts to retain and attract the talent in the country The Talent Roadmap

2020 launched by Prime Minister Datuk Seri Najib Razak has the following

objectives optimising Malaysian talent attracting and facilitating global talent and

building a network of top talent Lim (2012) a reporter from Sin Chiew Daily

mentioned that there used to be 200 talents (graduates on government scholarship)

returned and served in various government department but only one stayed after five

years

Since our nation gained independence our nation has experienced a tremendous

increase in our living standards We lead a comfortable life And the price to pay for

higher living standards will be higher cost of living The educated youngsters who

prefer to enjoy their lives are willing to spend the expenses on entertainments They

are different from their previous generations who would rather keep and save their

money to give better environment for their next generations

The Malaysian Trades Union Congress (MTUC) secretary-general Abdul Halim

Mansor pointed out that the rising cost of living could result in high turnover rate

among workers When their salaries cannot meet the cost of living they will start

hunting for a better-paying job Moreover the scenarios usually occur to semishy

10

skilled workers if compared with less skilled workers who work on the production

floor Therefore the turnover rate is increasing with the rise of the living cost

Engaging talented personnel is proven to be a difficult task for private employers

because heshe determines the survival and development of the company in this

competitive economic environment Each employee might have different need that

the employer should try to accommodate in order to prevent job hopping

In order words it is hard to establish staff loyalty as there are many intrinsic and

extrinsic factors that influence the individuals decision to leave a company such as

the personal factors job factors and benefits factors For instance culture

management level and the workforce environment of an organisation might be

another issue of influencing the turnover rate of a company

Lower emotional exhaustion more support from the school and higher job

satisfaction are needed to keep the music teachers in school The survey of 93 music

teachers from private music schools around Klang Valley in Malaysia indicated that

the support from the music schools high job satisfaction and low emotional

exhaustion apd pressure of teaching will likely prevent them from job hopping

(Wong amp Tay 2010)

A committed employee who has high job involvement and job satisfaction will less

likely to leave the firm The questionnaire survey conducted on 116 Information

Systems (IS) personnel working in multinational companies in Malaysia showed that

11

IS personnels job involvement and jobs satisfaction that are positively related to

organizational commitment have significant impact on their tendency to leave a job

(Teh amp Tritos 2011)

13 Research Objectives

The purposes of this study are to in context of employees working at Sibu to

examine the relationship between job satisfaction (intrinsicmotivation factors and

extrinsichygiene factors) towards employee retention Besides that the research

objective IS to investigate

(intrinsicmotivation factors and

retention

the

ext

relationship

rinsichygiene

between

factors)

job

towards

satisfaction

employee

14 Research Questions

The study is to address as the questions in context of employees working at Sibu

The first qu~stion is about What is the relationship the relationship between job

satisfaction and employee retention The second question is determined What is

the relationship between the extrinsichygiene factors and intrinsicmotivation factors

of job satisfaction and employee retention Lastly the question of What is the

most important factor in detennining the employee retention of the private sectors in

Sibu Sarawak Malaysia

12

15 Definition of Key Terms

Employee Engagement

Employee engagement- Kahn (1990) claim that utilize the commitment or

contribution of an employee self-governance by their putting their efforts skills and

knowledge towards their works physically cognitively and emotionally from the

start being employed in an organisation

Talent Turnover

Gustafson (2002) defined turnover as the ratio of the number of organizational

members who have left during the period being considered divided by the average

number of people in that organization during that period For managers it means the

entire process associated with filling a vacancy Turnover is also known as the

replacement cycle when a position is vacated each time either voluntarily or

involuntarily a new employee is hired and trained

Job Satisfaction

Job satisfaction is an attitude that individuals have about their jobs It results from

their perception of the degree to which there is good fit between the individual and

the organisation Ivancevich et aI s (1997 p 91) Job satisfaction is also described

as an emotional response towards various facets of ones job such as equitable pay

and working conditions (Kreitner Kinicki amp Buelens 1999)

13

Page 11: JOB SATISFACTION TOWARDS EMPLOYEE RETENTION … Satisfaction Towards Employee... · paper is designed to understand the job satisfaction towards employee retention among ... questionnaire

I

CHAPTER FIVE DISCUSSION AND CONCLUSION

51 Introduction 55

52 The Backdrop 55

53 Discussion 56

531 IntrinsiclMotivation Job Satisfaction Factors in Staff Retention 57

532 ExtrinsicHygiene Job Satisfaction Factors in Staff Retention 58

54 Implications 60

55 Potential Limitations 63

56 Directions for Future Research 64

57 Conclusion 65

REFERENCES

APPENDIX

xi

LIST OF TABLES

Pages

Table 21 Employee Satisfaction Theory (Motivation amp Hygiene) 30

Table 22 Independent Variables and Dependent Variable 32

Table 31 Total Questionnaire Distributed Collected and Unretumed 38

Questionnaire

Table 32 Interpretation of the Correlation Coefficient 43

Table 41 Frequency Profile of Respondents 47

Table 42 Reliability Analysis 49

Table 43 Descriptive Statistics 50

Table 44 Correlation Analysis - Pearson Correlations Matrix 51

Table 45 Regression Analysis 52

XII

I

The above statistic demonstrated the importance of talent pool for a company

Indeed proper talent management approach especially those skilled labours are able

to contribute more than their low-skilled counterparts The MicKinsey Quarterly

claimed that knowledge workers can create more profit than others employees do shy

up to three times more and their work requires minimal oversight

Both intrinsic and extrinsic motivation factors can affect and enhance the job

satisfaction of the employees Halepota (2005) conceived motivations as a person

prescribed by the active participation and commitment to the achievement of results

Furthermore he added motivated concept is an abstract construct because different

strategies have different results at different times In other words the results may

change and varies from times to times as with only one strategy that can produce to

ensure guaranteed favourable outcome all the times

Employee job satisfaction has been explored and used to improve the talent turnover

for the firm According Hom and Kinicki (200 I) job satisfaction is a useful strategy

to prevent turnover rate for an employee The paper that analyzes the effect of job

satisfaction on labour turnover by gender in Switzerland revealed that job

satisfaction ~~ a very good predictor of future quits and that job satisfaction does not

influence the inclination to become non-employed It further added that the gender

as a factor does not affect job satisfactIOn (Sousa-Poza 2003)

2

Career development or advancement and on the job training have been proven to be

able to improve job satisfaction of the employees Theodossiou and Zangelidis (2009)

claimed that job satisfaction of individual employees in jobs with career prospects is

higher compared with those who are not Using the data from British 2004

Workplace Employee Relations Survey (WERS) Jones et aI (2008) found out that

training has positive association with job satisfaction which in tum can positively

affect the job performance

Reward is another key for staff job satisfaction The study on the effect of four

management commitments to service factors on employees job satisfaction and

service behaviours in Bangkok Thailand showed that rewards empowerment and

training are positively related to job satisfaction while organizational support does

not Moreover job satisfaction has significant impact on customer service behaviour

and cooperation (Tavitiyaman et aI 20 II)

In technical field working schedules recognition training and wage wiH determine

the staff job satisfaction Kharnnayev (2001) in the conference publication shy

retention of high tech employees revealed that technical employees demand for

flexible schedules the opportunity to gain respect and additional income by doing a

job weB and the opportunity to improve their job skills via dedicated learning If the

firm wants its employees to remain satisfied and productive it needs to deliver those

benefits in conjunction with a competitive salary

3

The quality of the service of the service industries can be influenced by employees

job satisfaction and commitment to the organisation The research on th6 influence

of organizational commitment and job satisfaction on service quality of customer-

contact employees in banking call centres (sample size 342 employees in four

telephone call centres of a major UK retail bank) showed that job satisfaction and

organizational commitment of employees can significantly affect the quality of the

service offered (Malhotra amp Mukherjee 2004)

In the teaching profession the teachers demanded for better wages working hours

and day-off related to the career The study on job satisfaction among school

teachers in Cyprus using a sample of 461 teachers and administrators (adapted

version of questionnaire Teacher 2000 Project) claimed that Cypriot teachers chose

this career due to the salary the working hours and the holidays associated with this

profession (Zembylas amp Papanastasiou 2005)

Supervision is another area that is being studied in order to improve the job

satisfaction of the employees The survey carried out on 927 respondents on the job

satisfaction in a stable child welfare workforce found out that supervision

experiencing difficulties with working conditions lack of external client resources

length of employment and being a supervisor can be the highest predictors of job

dissatisfaction (Strand amp Dore 2008)

4

Pusat Khidmat MakJumat Akademik UNlVERSm MALAYSIA SARAWAK

Although the hotel and tourism industry is flourishing the industry faced human

resource challenges The major challenges are employee retention human resource

shortages shortages of qualified managers and the expectations gap between

education and industry (Zhang amp Wu 2004) In short the difficulty of looking for a

suitable candidate for a duty makes staff turnover an urgent issue that needed to be

tackled

Researchers have been searching for the causes of staff turnover According to

Gustafson (2002) the five most cited internal causes of turnover were rate of pay

communication problems lack of advancement oppOltunities lack of recognition for

a job well done and conflict with management while the five most cited external

causes of turnover were better pay elsewhere increases of pay in other industries

low unemployment a strong local or regional economy and low quality of

employees overall

In the academic setting there are a number of factors that can affect the retention of

the academic staff Arulkumaran (1999) claimed that the economic standings

quantum of clinical work numeration retirement age facilities for research criteria

for promotion health care delivery system the financial system and the outlook of 01

the universities which operate differently in South-East Asian countries can

determine the recruitment and retention of academic staff

5

Company policy has been explored to determine its effect on staff retention

Although environmental factors such as local labour markets and individual

employee variables can affect labour turnover organizational factors (company

culture and values) and management behaviour (operational and control variables)

have significantly effect on staff retention rate in retail industry (Booth amp Hamer

2007)

The results from the decision trees using the sample data from a questionnaire survey

of 237 managers in Singapore showed that there is positive significantly association

between ethical culture constructs (top management support for ethical behaviour

and the association between ethical behaviour and career success within the

organization) and job satisfaction It also supp0l1ed that job satisfaction was

positively related to organizational commitment (Koh amp Boh 2004)

Improving employee job satisfaction and staff retention may be able to enhance

customer satisfaction In health care facilities the research on employee satisfaction

and employee retention as catalysts to patient satisfaction illustrated that focusing on

employee satisfaction and subsequently employee retention could be the catalysts to

patient satisfaction (Collins et aI 2008)

6

111 The Malaysian Scenario

As Malaysia strived to upgrade from a middle income nation to a high Income

country In order to achieve the targets of Wawasan 2020 her reliance on

productivity and irulOvation to drive economic growth has become even greater

Under the 10th Malaysia Plan talent management had been identified as the key to

succeed (Baharin et aI 201l)

Compared to working population China the Malaysians upheld different values in

workplace Although the tendency to quit is affected by the vvorkers key-degree

performance visibility off-job recompense and reward fairness in China the staff

turnover rate among Malaysians is influenced by the current management for

retaining talents job-coupling and equity of rewards that may impact the talents job

satisfaction and organizational commitment (Zheng et aI 2009)

It is difficult to find the proper talent that can carry out the duty properly in a firm

especially in the service industry The 2-Phase survey (169 human resource

managers from service companies) that investigated the gap between cooperate

needs and availability of skills and attributes among the talent pool of Malaysia

service found out that there was a gap between i~dustry needs and the availability of

important competencies within the pool of prospective workers The service industry

looked for those with competencies in communication information technology

customer relationship management and exhibited high motivation and career

7

commitment (Downe et ai 2012) This reiterated the importance of retaining the

skillful staff in a finn

Organizational justice as part of company policy is important in detennining the

Malaysian job satisfaction and tumover intention Based on the finding on the impact

of organizational justice on employees jobs satisfaction in Klang Valley Malaysia

the high level of employees perception towards faimess to means used to detennine

outcomes (procedural justice) and faimess of the outcomes employees receive

(distributive justice) can increase the level of employees job satisfaction

organizational commitment and reduce tumover intention (Choong et aI 20 II)

Another component of company policy - management is also essential in shaping the

job satisfaction among Malaysians The study on the job satisfaction level among

human resource employees in Malaysia by investigating employee relationship with

management compensation and benefits and working environment as independent

variables to job satisfaction demonstrated that the employee relationship with

management has greater influence on job satisfaction than the other variables

compensation and benefits and working environment (Teoh et ai 2011)

The role of supervision that can affect the job satisfaction in Malaysia cannot be

ignored The result from the study on the impact of mentoring and job satisfaction in

Malaysian SMEs revealed that career mentoring has positive relationship with all

dimensions of job satisfaction studies co-workers job itself promotions and

supervisors (Lo amp Ramayah 2011)

8

Furthennore the employers need to pay attention to the working condition as part of

the dimension of job satisfaction to retain their high perfonners The research that

uses Herzbergs motivation-hygiene theory and job satisfaction in Malaysia retail

sector at Bandar Sunway Shopping Mall Selangor indicated that working conditions

are the most significant in motivating sales personnel followed by recognition

company policy and salary (Tan amp Arona 2011)

12 Problem Statement

The study conducted by Aon Hewitts (2010) showed that the average overall

tumover rate (including voluntary and involuntary) for participating organizations is

157 percent for 2010 Furthennore the voluntary tumover rate for Malaysia has

increased from 101 in 2009 to 13 in 2010 It is hard to retain the workers with

the characteristic of job loyalty in non-manufacturing sectors as 75 of the

supervisor level will hops their jobs within a year stated by Goh (2012)

The Star Newspaper (Feb 19 2012) reported that in non-manufacturing sectors

some employsrs have to replace 75 of their executives who switch jobs within a

year According to Malaysian Employers Federation (MEF) executive director

Shamsuddin Bardan indicated that it cost an employer an average RM25 000 to

RM30 000 to replace each employee who quit The cost for it includes advertising

interview screening background checks training and medical check-up Hence

9

retaining an employee is a challenging task for an employer Private companies face

trouble if there is a shortage of employees to contribute to the companies

Malaysia is lagging behind in the war for talent even though our country has made

various efforts to retain and attract the talent in the country The Talent Roadmap

2020 launched by Prime Minister Datuk Seri Najib Razak has the following

objectives optimising Malaysian talent attracting and facilitating global talent and

building a network of top talent Lim (2012) a reporter from Sin Chiew Daily

mentioned that there used to be 200 talents (graduates on government scholarship)

returned and served in various government department but only one stayed after five

years

Since our nation gained independence our nation has experienced a tremendous

increase in our living standards We lead a comfortable life And the price to pay for

higher living standards will be higher cost of living The educated youngsters who

prefer to enjoy their lives are willing to spend the expenses on entertainments They

are different from their previous generations who would rather keep and save their

money to give better environment for their next generations

The Malaysian Trades Union Congress (MTUC) secretary-general Abdul Halim

Mansor pointed out that the rising cost of living could result in high turnover rate

among workers When their salaries cannot meet the cost of living they will start

hunting for a better-paying job Moreover the scenarios usually occur to semishy

10

skilled workers if compared with less skilled workers who work on the production

floor Therefore the turnover rate is increasing with the rise of the living cost

Engaging talented personnel is proven to be a difficult task for private employers

because heshe determines the survival and development of the company in this

competitive economic environment Each employee might have different need that

the employer should try to accommodate in order to prevent job hopping

In order words it is hard to establish staff loyalty as there are many intrinsic and

extrinsic factors that influence the individuals decision to leave a company such as

the personal factors job factors and benefits factors For instance culture

management level and the workforce environment of an organisation might be

another issue of influencing the turnover rate of a company

Lower emotional exhaustion more support from the school and higher job

satisfaction are needed to keep the music teachers in school The survey of 93 music

teachers from private music schools around Klang Valley in Malaysia indicated that

the support from the music schools high job satisfaction and low emotional

exhaustion apd pressure of teaching will likely prevent them from job hopping

(Wong amp Tay 2010)

A committed employee who has high job involvement and job satisfaction will less

likely to leave the firm The questionnaire survey conducted on 116 Information

Systems (IS) personnel working in multinational companies in Malaysia showed that

11

IS personnels job involvement and jobs satisfaction that are positively related to

organizational commitment have significant impact on their tendency to leave a job

(Teh amp Tritos 2011)

13 Research Objectives

The purposes of this study are to in context of employees working at Sibu to

examine the relationship between job satisfaction (intrinsicmotivation factors and

extrinsichygiene factors) towards employee retention Besides that the research

objective IS to investigate

(intrinsicmotivation factors and

retention

the

ext

relationship

rinsichygiene

between

factors)

job

towards

satisfaction

employee

14 Research Questions

The study is to address as the questions in context of employees working at Sibu

The first qu~stion is about What is the relationship the relationship between job

satisfaction and employee retention The second question is determined What is

the relationship between the extrinsichygiene factors and intrinsicmotivation factors

of job satisfaction and employee retention Lastly the question of What is the

most important factor in detennining the employee retention of the private sectors in

Sibu Sarawak Malaysia

12

15 Definition of Key Terms

Employee Engagement

Employee engagement- Kahn (1990) claim that utilize the commitment or

contribution of an employee self-governance by their putting their efforts skills and

knowledge towards their works physically cognitively and emotionally from the

start being employed in an organisation

Talent Turnover

Gustafson (2002) defined turnover as the ratio of the number of organizational

members who have left during the period being considered divided by the average

number of people in that organization during that period For managers it means the

entire process associated with filling a vacancy Turnover is also known as the

replacement cycle when a position is vacated each time either voluntarily or

involuntarily a new employee is hired and trained

Job Satisfaction

Job satisfaction is an attitude that individuals have about their jobs It results from

their perception of the degree to which there is good fit between the individual and

the organisation Ivancevich et aI s (1997 p 91) Job satisfaction is also described

as an emotional response towards various facets of ones job such as equitable pay

and working conditions (Kreitner Kinicki amp Buelens 1999)

13

Page 12: JOB SATISFACTION TOWARDS EMPLOYEE RETENTION … Satisfaction Towards Employee... · paper is designed to understand the job satisfaction towards employee retention among ... questionnaire

LIST OF TABLES

Pages

Table 21 Employee Satisfaction Theory (Motivation amp Hygiene) 30

Table 22 Independent Variables and Dependent Variable 32

Table 31 Total Questionnaire Distributed Collected and Unretumed 38

Questionnaire

Table 32 Interpretation of the Correlation Coefficient 43

Table 41 Frequency Profile of Respondents 47

Table 42 Reliability Analysis 49

Table 43 Descriptive Statistics 50

Table 44 Correlation Analysis - Pearson Correlations Matrix 51

Table 45 Regression Analysis 52

XII

I

The above statistic demonstrated the importance of talent pool for a company

Indeed proper talent management approach especially those skilled labours are able

to contribute more than their low-skilled counterparts The MicKinsey Quarterly

claimed that knowledge workers can create more profit than others employees do shy

up to three times more and their work requires minimal oversight

Both intrinsic and extrinsic motivation factors can affect and enhance the job

satisfaction of the employees Halepota (2005) conceived motivations as a person

prescribed by the active participation and commitment to the achievement of results

Furthermore he added motivated concept is an abstract construct because different

strategies have different results at different times In other words the results may

change and varies from times to times as with only one strategy that can produce to

ensure guaranteed favourable outcome all the times

Employee job satisfaction has been explored and used to improve the talent turnover

for the firm According Hom and Kinicki (200 I) job satisfaction is a useful strategy

to prevent turnover rate for an employee The paper that analyzes the effect of job

satisfaction on labour turnover by gender in Switzerland revealed that job

satisfaction ~~ a very good predictor of future quits and that job satisfaction does not

influence the inclination to become non-employed It further added that the gender

as a factor does not affect job satisfactIOn (Sousa-Poza 2003)

2

Career development or advancement and on the job training have been proven to be

able to improve job satisfaction of the employees Theodossiou and Zangelidis (2009)

claimed that job satisfaction of individual employees in jobs with career prospects is

higher compared with those who are not Using the data from British 2004

Workplace Employee Relations Survey (WERS) Jones et aI (2008) found out that

training has positive association with job satisfaction which in tum can positively

affect the job performance

Reward is another key for staff job satisfaction The study on the effect of four

management commitments to service factors on employees job satisfaction and

service behaviours in Bangkok Thailand showed that rewards empowerment and

training are positively related to job satisfaction while organizational support does

not Moreover job satisfaction has significant impact on customer service behaviour

and cooperation (Tavitiyaman et aI 20 II)

In technical field working schedules recognition training and wage wiH determine

the staff job satisfaction Kharnnayev (2001) in the conference publication shy

retention of high tech employees revealed that technical employees demand for

flexible schedules the opportunity to gain respect and additional income by doing a

job weB and the opportunity to improve their job skills via dedicated learning If the

firm wants its employees to remain satisfied and productive it needs to deliver those

benefits in conjunction with a competitive salary

3

The quality of the service of the service industries can be influenced by employees

job satisfaction and commitment to the organisation The research on th6 influence

of organizational commitment and job satisfaction on service quality of customer-

contact employees in banking call centres (sample size 342 employees in four

telephone call centres of a major UK retail bank) showed that job satisfaction and

organizational commitment of employees can significantly affect the quality of the

service offered (Malhotra amp Mukherjee 2004)

In the teaching profession the teachers demanded for better wages working hours

and day-off related to the career The study on job satisfaction among school

teachers in Cyprus using a sample of 461 teachers and administrators (adapted

version of questionnaire Teacher 2000 Project) claimed that Cypriot teachers chose

this career due to the salary the working hours and the holidays associated with this

profession (Zembylas amp Papanastasiou 2005)

Supervision is another area that is being studied in order to improve the job

satisfaction of the employees The survey carried out on 927 respondents on the job

satisfaction in a stable child welfare workforce found out that supervision

experiencing difficulties with working conditions lack of external client resources

length of employment and being a supervisor can be the highest predictors of job

dissatisfaction (Strand amp Dore 2008)

4

Pusat Khidmat MakJumat Akademik UNlVERSm MALAYSIA SARAWAK

Although the hotel and tourism industry is flourishing the industry faced human

resource challenges The major challenges are employee retention human resource

shortages shortages of qualified managers and the expectations gap between

education and industry (Zhang amp Wu 2004) In short the difficulty of looking for a

suitable candidate for a duty makes staff turnover an urgent issue that needed to be

tackled

Researchers have been searching for the causes of staff turnover According to

Gustafson (2002) the five most cited internal causes of turnover were rate of pay

communication problems lack of advancement oppOltunities lack of recognition for

a job well done and conflict with management while the five most cited external

causes of turnover were better pay elsewhere increases of pay in other industries

low unemployment a strong local or regional economy and low quality of

employees overall

In the academic setting there are a number of factors that can affect the retention of

the academic staff Arulkumaran (1999) claimed that the economic standings

quantum of clinical work numeration retirement age facilities for research criteria

for promotion health care delivery system the financial system and the outlook of 01

the universities which operate differently in South-East Asian countries can

determine the recruitment and retention of academic staff

5

Company policy has been explored to determine its effect on staff retention

Although environmental factors such as local labour markets and individual

employee variables can affect labour turnover organizational factors (company

culture and values) and management behaviour (operational and control variables)

have significantly effect on staff retention rate in retail industry (Booth amp Hamer

2007)

The results from the decision trees using the sample data from a questionnaire survey

of 237 managers in Singapore showed that there is positive significantly association

between ethical culture constructs (top management support for ethical behaviour

and the association between ethical behaviour and career success within the

organization) and job satisfaction It also supp0l1ed that job satisfaction was

positively related to organizational commitment (Koh amp Boh 2004)

Improving employee job satisfaction and staff retention may be able to enhance

customer satisfaction In health care facilities the research on employee satisfaction

and employee retention as catalysts to patient satisfaction illustrated that focusing on

employee satisfaction and subsequently employee retention could be the catalysts to

patient satisfaction (Collins et aI 2008)

6

111 The Malaysian Scenario

As Malaysia strived to upgrade from a middle income nation to a high Income

country In order to achieve the targets of Wawasan 2020 her reliance on

productivity and irulOvation to drive economic growth has become even greater

Under the 10th Malaysia Plan talent management had been identified as the key to

succeed (Baharin et aI 201l)

Compared to working population China the Malaysians upheld different values in

workplace Although the tendency to quit is affected by the vvorkers key-degree

performance visibility off-job recompense and reward fairness in China the staff

turnover rate among Malaysians is influenced by the current management for

retaining talents job-coupling and equity of rewards that may impact the talents job

satisfaction and organizational commitment (Zheng et aI 2009)

It is difficult to find the proper talent that can carry out the duty properly in a firm

especially in the service industry The 2-Phase survey (169 human resource

managers from service companies) that investigated the gap between cooperate

needs and availability of skills and attributes among the talent pool of Malaysia

service found out that there was a gap between i~dustry needs and the availability of

important competencies within the pool of prospective workers The service industry

looked for those with competencies in communication information technology

customer relationship management and exhibited high motivation and career

7

commitment (Downe et ai 2012) This reiterated the importance of retaining the

skillful staff in a finn

Organizational justice as part of company policy is important in detennining the

Malaysian job satisfaction and tumover intention Based on the finding on the impact

of organizational justice on employees jobs satisfaction in Klang Valley Malaysia

the high level of employees perception towards faimess to means used to detennine

outcomes (procedural justice) and faimess of the outcomes employees receive

(distributive justice) can increase the level of employees job satisfaction

organizational commitment and reduce tumover intention (Choong et aI 20 II)

Another component of company policy - management is also essential in shaping the

job satisfaction among Malaysians The study on the job satisfaction level among

human resource employees in Malaysia by investigating employee relationship with

management compensation and benefits and working environment as independent

variables to job satisfaction demonstrated that the employee relationship with

management has greater influence on job satisfaction than the other variables

compensation and benefits and working environment (Teoh et ai 2011)

The role of supervision that can affect the job satisfaction in Malaysia cannot be

ignored The result from the study on the impact of mentoring and job satisfaction in

Malaysian SMEs revealed that career mentoring has positive relationship with all

dimensions of job satisfaction studies co-workers job itself promotions and

supervisors (Lo amp Ramayah 2011)

8

Furthennore the employers need to pay attention to the working condition as part of

the dimension of job satisfaction to retain their high perfonners The research that

uses Herzbergs motivation-hygiene theory and job satisfaction in Malaysia retail

sector at Bandar Sunway Shopping Mall Selangor indicated that working conditions

are the most significant in motivating sales personnel followed by recognition

company policy and salary (Tan amp Arona 2011)

12 Problem Statement

The study conducted by Aon Hewitts (2010) showed that the average overall

tumover rate (including voluntary and involuntary) for participating organizations is

157 percent for 2010 Furthennore the voluntary tumover rate for Malaysia has

increased from 101 in 2009 to 13 in 2010 It is hard to retain the workers with

the characteristic of job loyalty in non-manufacturing sectors as 75 of the

supervisor level will hops their jobs within a year stated by Goh (2012)

The Star Newspaper (Feb 19 2012) reported that in non-manufacturing sectors

some employsrs have to replace 75 of their executives who switch jobs within a

year According to Malaysian Employers Federation (MEF) executive director

Shamsuddin Bardan indicated that it cost an employer an average RM25 000 to

RM30 000 to replace each employee who quit The cost for it includes advertising

interview screening background checks training and medical check-up Hence

9

retaining an employee is a challenging task for an employer Private companies face

trouble if there is a shortage of employees to contribute to the companies

Malaysia is lagging behind in the war for talent even though our country has made

various efforts to retain and attract the talent in the country The Talent Roadmap

2020 launched by Prime Minister Datuk Seri Najib Razak has the following

objectives optimising Malaysian talent attracting and facilitating global talent and

building a network of top talent Lim (2012) a reporter from Sin Chiew Daily

mentioned that there used to be 200 talents (graduates on government scholarship)

returned and served in various government department but only one stayed after five

years

Since our nation gained independence our nation has experienced a tremendous

increase in our living standards We lead a comfortable life And the price to pay for

higher living standards will be higher cost of living The educated youngsters who

prefer to enjoy their lives are willing to spend the expenses on entertainments They

are different from their previous generations who would rather keep and save their

money to give better environment for their next generations

The Malaysian Trades Union Congress (MTUC) secretary-general Abdul Halim

Mansor pointed out that the rising cost of living could result in high turnover rate

among workers When their salaries cannot meet the cost of living they will start

hunting for a better-paying job Moreover the scenarios usually occur to semishy

10

skilled workers if compared with less skilled workers who work on the production

floor Therefore the turnover rate is increasing with the rise of the living cost

Engaging talented personnel is proven to be a difficult task for private employers

because heshe determines the survival and development of the company in this

competitive economic environment Each employee might have different need that

the employer should try to accommodate in order to prevent job hopping

In order words it is hard to establish staff loyalty as there are many intrinsic and

extrinsic factors that influence the individuals decision to leave a company such as

the personal factors job factors and benefits factors For instance culture

management level and the workforce environment of an organisation might be

another issue of influencing the turnover rate of a company

Lower emotional exhaustion more support from the school and higher job

satisfaction are needed to keep the music teachers in school The survey of 93 music

teachers from private music schools around Klang Valley in Malaysia indicated that

the support from the music schools high job satisfaction and low emotional

exhaustion apd pressure of teaching will likely prevent them from job hopping

(Wong amp Tay 2010)

A committed employee who has high job involvement and job satisfaction will less

likely to leave the firm The questionnaire survey conducted on 116 Information

Systems (IS) personnel working in multinational companies in Malaysia showed that

11

IS personnels job involvement and jobs satisfaction that are positively related to

organizational commitment have significant impact on their tendency to leave a job

(Teh amp Tritos 2011)

13 Research Objectives

The purposes of this study are to in context of employees working at Sibu to

examine the relationship between job satisfaction (intrinsicmotivation factors and

extrinsichygiene factors) towards employee retention Besides that the research

objective IS to investigate

(intrinsicmotivation factors and

retention

the

ext

relationship

rinsichygiene

between

factors)

job

towards

satisfaction

employee

14 Research Questions

The study is to address as the questions in context of employees working at Sibu

The first qu~stion is about What is the relationship the relationship between job

satisfaction and employee retention The second question is determined What is

the relationship between the extrinsichygiene factors and intrinsicmotivation factors

of job satisfaction and employee retention Lastly the question of What is the

most important factor in detennining the employee retention of the private sectors in

Sibu Sarawak Malaysia

12

15 Definition of Key Terms

Employee Engagement

Employee engagement- Kahn (1990) claim that utilize the commitment or

contribution of an employee self-governance by their putting their efforts skills and

knowledge towards their works physically cognitively and emotionally from the

start being employed in an organisation

Talent Turnover

Gustafson (2002) defined turnover as the ratio of the number of organizational

members who have left during the period being considered divided by the average

number of people in that organization during that period For managers it means the

entire process associated with filling a vacancy Turnover is also known as the

replacement cycle when a position is vacated each time either voluntarily or

involuntarily a new employee is hired and trained

Job Satisfaction

Job satisfaction is an attitude that individuals have about their jobs It results from

their perception of the degree to which there is good fit between the individual and

the organisation Ivancevich et aI s (1997 p 91) Job satisfaction is also described

as an emotional response towards various facets of ones job such as equitable pay

and working conditions (Kreitner Kinicki amp Buelens 1999)

13

Page 13: JOB SATISFACTION TOWARDS EMPLOYEE RETENTION … Satisfaction Towards Employee... · paper is designed to understand the job satisfaction towards employee retention among ... questionnaire

I

The above statistic demonstrated the importance of talent pool for a company

Indeed proper talent management approach especially those skilled labours are able

to contribute more than their low-skilled counterparts The MicKinsey Quarterly

claimed that knowledge workers can create more profit than others employees do shy

up to three times more and their work requires minimal oversight

Both intrinsic and extrinsic motivation factors can affect and enhance the job

satisfaction of the employees Halepota (2005) conceived motivations as a person

prescribed by the active participation and commitment to the achievement of results

Furthermore he added motivated concept is an abstract construct because different

strategies have different results at different times In other words the results may

change and varies from times to times as with only one strategy that can produce to

ensure guaranteed favourable outcome all the times

Employee job satisfaction has been explored and used to improve the talent turnover

for the firm According Hom and Kinicki (200 I) job satisfaction is a useful strategy

to prevent turnover rate for an employee The paper that analyzes the effect of job

satisfaction on labour turnover by gender in Switzerland revealed that job

satisfaction ~~ a very good predictor of future quits and that job satisfaction does not

influence the inclination to become non-employed It further added that the gender

as a factor does not affect job satisfactIOn (Sousa-Poza 2003)

2

Career development or advancement and on the job training have been proven to be

able to improve job satisfaction of the employees Theodossiou and Zangelidis (2009)

claimed that job satisfaction of individual employees in jobs with career prospects is

higher compared with those who are not Using the data from British 2004

Workplace Employee Relations Survey (WERS) Jones et aI (2008) found out that

training has positive association with job satisfaction which in tum can positively

affect the job performance

Reward is another key for staff job satisfaction The study on the effect of four

management commitments to service factors on employees job satisfaction and

service behaviours in Bangkok Thailand showed that rewards empowerment and

training are positively related to job satisfaction while organizational support does

not Moreover job satisfaction has significant impact on customer service behaviour

and cooperation (Tavitiyaman et aI 20 II)

In technical field working schedules recognition training and wage wiH determine

the staff job satisfaction Kharnnayev (2001) in the conference publication shy

retention of high tech employees revealed that technical employees demand for

flexible schedules the opportunity to gain respect and additional income by doing a

job weB and the opportunity to improve their job skills via dedicated learning If the

firm wants its employees to remain satisfied and productive it needs to deliver those

benefits in conjunction with a competitive salary

3

The quality of the service of the service industries can be influenced by employees

job satisfaction and commitment to the organisation The research on th6 influence

of organizational commitment and job satisfaction on service quality of customer-

contact employees in banking call centres (sample size 342 employees in four

telephone call centres of a major UK retail bank) showed that job satisfaction and

organizational commitment of employees can significantly affect the quality of the

service offered (Malhotra amp Mukherjee 2004)

In the teaching profession the teachers demanded for better wages working hours

and day-off related to the career The study on job satisfaction among school

teachers in Cyprus using a sample of 461 teachers and administrators (adapted

version of questionnaire Teacher 2000 Project) claimed that Cypriot teachers chose

this career due to the salary the working hours and the holidays associated with this

profession (Zembylas amp Papanastasiou 2005)

Supervision is another area that is being studied in order to improve the job

satisfaction of the employees The survey carried out on 927 respondents on the job

satisfaction in a stable child welfare workforce found out that supervision

experiencing difficulties with working conditions lack of external client resources

length of employment and being a supervisor can be the highest predictors of job

dissatisfaction (Strand amp Dore 2008)

4

Pusat Khidmat MakJumat Akademik UNlVERSm MALAYSIA SARAWAK

Although the hotel and tourism industry is flourishing the industry faced human

resource challenges The major challenges are employee retention human resource

shortages shortages of qualified managers and the expectations gap between

education and industry (Zhang amp Wu 2004) In short the difficulty of looking for a

suitable candidate for a duty makes staff turnover an urgent issue that needed to be

tackled

Researchers have been searching for the causes of staff turnover According to

Gustafson (2002) the five most cited internal causes of turnover were rate of pay

communication problems lack of advancement oppOltunities lack of recognition for

a job well done and conflict with management while the five most cited external

causes of turnover were better pay elsewhere increases of pay in other industries

low unemployment a strong local or regional economy and low quality of

employees overall

In the academic setting there are a number of factors that can affect the retention of

the academic staff Arulkumaran (1999) claimed that the economic standings

quantum of clinical work numeration retirement age facilities for research criteria

for promotion health care delivery system the financial system and the outlook of 01

the universities which operate differently in South-East Asian countries can

determine the recruitment and retention of academic staff

5

Company policy has been explored to determine its effect on staff retention

Although environmental factors such as local labour markets and individual

employee variables can affect labour turnover organizational factors (company

culture and values) and management behaviour (operational and control variables)

have significantly effect on staff retention rate in retail industry (Booth amp Hamer

2007)

The results from the decision trees using the sample data from a questionnaire survey

of 237 managers in Singapore showed that there is positive significantly association

between ethical culture constructs (top management support for ethical behaviour

and the association between ethical behaviour and career success within the

organization) and job satisfaction It also supp0l1ed that job satisfaction was

positively related to organizational commitment (Koh amp Boh 2004)

Improving employee job satisfaction and staff retention may be able to enhance

customer satisfaction In health care facilities the research on employee satisfaction

and employee retention as catalysts to patient satisfaction illustrated that focusing on

employee satisfaction and subsequently employee retention could be the catalysts to

patient satisfaction (Collins et aI 2008)

6

111 The Malaysian Scenario

As Malaysia strived to upgrade from a middle income nation to a high Income

country In order to achieve the targets of Wawasan 2020 her reliance on

productivity and irulOvation to drive economic growth has become even greater

Under the 10th Malaysia Plan talent management had been identified as the key to

succeed (Baharin et aI 201l)

Compared to working population China the Malaysians upheld different values in

workplace Although the tendency to quit is affected by the vvorkers key-degree

performance visibility off-job recompense and reward fairness in China the staff

turnover rate among Malaysians is influenced by the current management for

retaining talents job-coupling and equity of rewards that may impact the talents job

satisfaction and organizational commitment (Zheng et aI 2009)

It is difficult to find the proper talent that can carry out the duty properly in a firm

especially in the service industry The 2-Phase survey (169 human resource

managers from service companies) that investigated the gap between cooperate

needs and availability of skills and attributes among the talent pool of Malaysia

service found out that there was a gap between i~dustry needs and the availability of

important competencies within the pool of prospective workers The service industry

looked for those with competencies in communication information technology

customer relationship management and exhibited high motivation and career

7

commitment (Downe et ai 2012) This reiterated the importance of retaining the

skillful staff in a finn

Organizational justice as part of company policy is important in detennining the

Malaysian job satisfaction and tumover intention Based on the finding on the impact

of organizational justice on employees jobs satisfaction in Klang Valley Malaysia

the high level of employees perception towards faimess to means used to detennine

outcomes (procedural justice) and faimess of the outcomes employees receive

(distributive justice) can increase the level of employees job satisfaction

organizational commitment and reduce tumover intention (Choong et aI 20 II)

Another component of company policy - management is also essential in shaping the

job satisfaction among Malaysians The study on the job satisfaction level among

human resource employees in Malaysia by investigating employee relationship with

management compensation and benefits and working environment as independent

variables to job satisfaction demonstrated that the employee relationship with

management has greater influence on job satisfaction than the other variables

compensation and benefits and working environment (Teoh et ai 2011)

The role of supervision that can affect the job satisfaction in Malaysia cannot be

ignored The result from the study on the impact of mentoring and job satisfaction in

Malaysian SMEs revealed that career mentoring has positive relationship with all

dimensions of job satisfaction studies co-workers job itself promotions and

supervisors (Lo amp Ramayah 2011)

8

Furthennore the employers need to pay attention to the working condition as part of

the dimension of job satisfaction to retain their high perfonners The research that

uses Herzbergs motivation-hygiene theory and job satisfaction in Malaysia retail

sector at Bandar Sunway Shopping Mall Selangor indicated that working conditions

are the most significant in motivating sales personnel followed by recognition

company policy and salary (Tan amp Arona 2011)

12 Problem Statement

The study conducted by Aon Hewitts (2010) showed that the average overall

tumover rate (including voluntary and involuntary) for participating organizations is

157 percent for 2010 Furthennore the voluntary tumover rate for Malaysia has

increased from 101 in 2009 to 13 in 2010 It is hard to retain the workers with

the characteristic of job loyalty in non-manufacturing sectors as 75 of the

supervisor level will hops their jobs within a year stated by Goh (2012)

The Star Newspaper (Feb 19 2012) reported that in non-manufacturing sectors

some employsrs have to replace 75 of their executives who switch jobs within a

year According to Malaysian Employers Federation (MEF) executive director

Shamsuddin Bardan indicated that it cost an employer an average RM25 000 to

RM30 000 to replace each employee who quit The cost for it includes advertising

interview screening background checks training and medical check-up Hence

9

retaining an employee is a challenging task for an employer Private companies face

trouble if there is a shortage of employees to contribute to the companies

Malaysia is lagging behind in the war for talent even though our country has made

various efforts to retain and attract the talent in the country The Talent Roadmap

2020 launched by Prime Minister Datuk Seri Najib Razak has the following

objectives optimising Malaysian talent attracting and facilitating global talent and

building a network of top talent Lim (2012) a reporter from Sin Chiew Daily

mentioned that there used to be 200 talents (graduates on government scholarship)

returned and served in various government department but only one stayed after five

years

Since our nation gained independence our nation has experienced a tremendous

increase in our living standards We lead a comfortable life And the price to pay for

higher living standards will be higher cost of living The educated youngsters who

prefer to enjoy their lives are willing to spend the expenses on entertainments They

are different from their previous generations who would rather keep and save their

money to give better environment for their next generations

The Malaysian Trades Union Congress (MTUC) secretary-general Abdul Halim

Mansor pointed out that the rising cost of living could result in high turnover rate

among workers When their salaries cannot meet the cost of living they will start

hunting for a better-paying job Moreover the scenarios usually occur to semishy

10

skilled workers if compared with less skilled workers who work on the production

floor Therefore the turnover rate is increasing with the rise of the living cost

Engaging talented personnel is proven to be a difficult task for private employers

because heshe determines the survival and development of the company in this

competitive economic environment Each employee might have different need that

the employer should try to accommodate in order to prevent job hopping

In order words it is hard to establish staff loyalty as there are many intrinsic and

extrinsic factors that influence the individuals decision to leave a company such as

the personal factors job factors and benefits factors For instance culture

management level and the workforce environment of an organisation might be

another issue of influencing the turnover rate of a company

Lower emotional exhaustion more support from the school and higher job

satisfaction are needed to keep the music teachers in school The survey of 93 music

teachers from private music schools around Klang Valley in Malaysia indicated that

the support from the music schools high job satisfaction and low emotional

exhaustion apd pressure of teaching will likely prevent them from job hopping

(Wong amp Tay 2010)

A committed employee who has high job involvement and job satisfaction will less

likely to leave the firm The questionnaire survey conducted on 116 Information

Systems (IS) personnel working in multinational companies in Malaysia showed that

11

IS personnels job involvement and jobs satisfaction that are positively related to

organizational commitment have significant impact on their tendency to leave a job

(Teh amp Tritos 2011)

13 Research Objectives

The purposes of this study are to in context of employees working at Sibu to

examine the relationship between job satisfaction (intrinsicmotivation factors and

extrinsichygiene factors) towards employee retention Besides that the research

objective IS to investigate

(intrinsicmotivation factors and

retention

the

ext

relationship

rinsichygiene

between

factors)

job

towards

satisfaction

employee

14 Research Questions

The study is to address as the questions in context of employees working at Sibu

The first qu~stion is about What is the relationship the relationship between job

satisfaction and employee retention The second question is determined What is

the relationship between the extrinsichygiene factors and intrinsicmotivation factors

of job satisfaction and employee retention Lastly the question of What is the

most important factor in detennining the employee retention of the private sectors in

Sibu Sarawak Malaysia

12

15 Definition of Key Terms

Employee Engagement

Employee engagement- Kahn (1990) claim that utilize the commitment or

contribution of an employee self-governance by their putting their efforts skills and

knowledge towards their works physically cognitively and emotionally from the

start being employed in an organisation

Talent Turnover

Gustafson (2002) defined turnover as the ratio of the number of organizational

members who have left during the period being considered divided by the average

number of people in that organization during that period For managers it means the

entire process associated with filling a vacancy Turnover is also known as the

replacement cycle when a position is vacated each time either voluntarily or

involuntarily a new employee is hired and trained

Job Satisfaction

Job satisfaction is an attitude that individuals have about their jobs It results from

their perception of the degree to which there is good fit between the individual and

the organisation Ivancevich et aI s (1997 p 91) Job satisfaction is also described

as an emotional response towards various facets of ones job such as equitable pay

and working conditions (Kreitner Kinicki amp Buelens 1999)

13

Page 14: JOB SATISFACTION TOWARDS EMPLOYEE RETENTION … Satisfaction Towards Employee... · paper is designed to understand the job satisfaction towards employee retention among ... questionnaire

Career development or advancement and on the job training have been proven to be

able to improve job satisfaction of the employees Theodossiou and Zangelidis (2009)

claimed that job satisfaction of individual employees in jobs with career prospects is

higher compared with those who are not Using the data from British 2004

Workplace Employee Relations Survey (WERS) Jones et aI (2008) found out that

training has positive association with job satisfaction which in tum can positively

affect the job performance

Reward is another key for staff job satisfaction The study on the effect of four

management commitments to service factors on employees job satisfaction and

service behaviours in Bangkok Thailand showed that rewards empowerment and

training are positively related to job satisfaction while organizational support does

not Moreover job satisfaction has significant impact on customer service behaviour

and cooperation (Tavitiyaman et aI 20 II)

In technical field working schedules recognition training and wage wiH determine

the staff job satisfaction Kharnnayev (2001) in the conference publication shy

retention of high tech employees revealed that technical employees demand for

flexible schedules the opportunity to gain respect and additional income by doing a

job weB and the opportunity to improve their job skills via dedicated learning If the

firm wants its employees to remain satisfied and productive it needs to deliver those

benefits in conjunction with a competitive salary

3

The quality of the service of the service industries can be influenced by employees

job satisfaction and commitment to the organisation The research on th6 influence

of organizational commitment and job satisfaction on service quality of customer-

contact employees in banking call centres (sample size 342 employees in four

telephone call centres of a major UK retail bank) showed that job satisfaction and

organizational commitment of employees can significantly affect the quality of the

service offered (Malhotra amp Mukherjee 2004)

In the teaching profession the teachers demanded for better wages working hours

and day-off related to the career The study on job satisfaction among school

teachers in Cyprus using a sample of 461 teachers and administrators (adapted

version of questionnaire Teacher 2000 Project) claimed that Cypriot teachers chose

this career due to the salary the working hours and the holidays associated with this

profession (Zembylas amp Papanastasiou 2005)

Supervision is another area that is being studied in order to improve the job

satisfaction of the employees The survey carried out on 927 respondents on the job

satisfaction in a stable child welfare workforce found out that supervision

experiencing difficulties with working conditions lack of external client resources

length of employment and being a supervisor can be the highest predictors of job

dissatisfaction (Strand amp Dore 2008)

4

Pusat Khidmat MakJumat Akademik UNlVERSm MALAYSIA SARAWAK

Although the hotel and tourism industry is flourishing the industry faced human

resource challenges The major challenges are employee retention human resource

shortages shortages of qualified managers and the expectations gap between

education and industry (Zhang amp Wu 2004) In short the difficulty of looking for a

suitable candidate for a duty makes staff turnover an urgent issue that needed to be

tackled

Researchers have been searching for the causes of staff turnover According to

Gustafson (2002) the five most cited internal causes of turnover were rate of pay

communication problems lack of advancement oppOltunities lack of recognition for

a job well done and conflict with management while the five most cited external

causes of turnover were better pay elsewhere increases of pay in other industries

low unemployment a strong local or regional economy and low quality of

employees overall

In the academic setting there are a number of factors that can affect the retention of

the academic staff Arulkumaran (1999) claimed that the economic standings

quantum of clinical work numeration retirement age facilities for research criteria

for promotion health care delivery system the financial system and the outlook of 01

the universities which operate differently in South-East Asian countries can

determine the recruitment and retention of academic staff

5

Company policy has been explored to determine its effect on staff retention

Although environmental factors such as local labour markets and individual

employee variables can affect labour turnover organizational factors (company

culture and values) and management behaviour (operational and control variables)

have significantly effect on staff retention rate in retail industry (Booth amp Hamer

2007)

The results from the decision trees using the sample data from a questionnaire survey

of 237 managers in Singapore showed that there is positive significantly association

between ethical culture constructs (top management support for ethical behaviour

and the association between ethical behaviour and career success within the

organization) and job satisfaction It also supp0l1ed that job satisfaction was

positively related to organizational commitment (Koh amp Boh 2004)

Improving employee job satisfaction and staff retention may be able to enhance

customer satisfaction In health care facilities the research on employee satisfaction

and employee retention as catalysts to patient satisfaction illustrated that focusing on

employee satisfaction and subsequently employee retention could be the catalysts to

patient satisfaction (Collins et aI 2008)

6

111 The Malaysian Scenario

As Malaysia strived to upgrade from a middle income nation to a high Income

country In order to achieve the targets of Wawasan 2020 her reliance on

productivity and irulOvation to drive economic growth has become even greater

Under the 10th Malaysia Plan talent management had been identified as the key to

succeed (Baharin et aI 201l)

Compared to working population China the Malaysians upheld different values in

workplace Although the tendency to quit is affected by the vvorkers key-degree

performance visibility off-job recompense and reward fairness in China the staff

turnover rate among Malaysians is influenced by the current management for

retaining talents job-coupling and equity of rewards that may impact the talents job

satisfaction and organizational commitment (Zheng et aI 2009)

It is difficult to find the proper talent that can carry out the duty properly in a firm

especially in the service industry The 2-Phase survey (169 human resource

managers from service companies) that investigated the gap between cooperate

needs and availability of skills and attributes among the talent pool of Malaysia

service found out that there was a gap between i~dustry needs and the availability of

important competencies within the pool of prospective workers The service industry

looked for those with competencies in communication information technology

customer relationship management and exhibited high motivation and career

7

commitment (Downe et ai 2012) This reiterated the importance of retaining the

skillful staff in a finn

Organizational justice as part of company policy is important in detennining the

Malaysian job satisfaction and tumover intention Based on the finding on the impact

of organizational justice on employees jobs satisfaction in Klang Valley Malaysia

the high level of employees perception towards faimess to means used to detennine

outcomes (procedural justice) and faimess of the outcomes employees receive

(distributive justice) can increase the level of employees job satisfaction

organizational commitment and reduce tumover intention (Choong et aI 20 II)

Another component of company policy - management is also essential in shaping the

job satisfaction among Malaysians The study on the job satisfaction level among

human resource employees in Malaysia by investigating employee relationship with

management compensation and benefits and working environment as independent

variables to job satisfaction demonstrated that the employee relationship with

management has greater influence on job satisfaction than the other variables

compensation and benefits and working environment (Teoh et ai 2011)

The role of supervision that can affect the job satisfaction in Malaysia cannot be

ignored The result from the study on the impact of mentoring and job satisfaction in

Malaysian SMEs revealed that career mentoring has positive relationship with all

dimensions of job satisfaction studies co-workers job itself promotions and

supervisors (Lo amp Ramayah 2011)

8

Furthennore the employers need to pay attention to the working condition as part of

the dimension of job satisfaction to retain their high perfonners The research that

uses Herzbergs motivation-hygiene theory and job satisfaction in Malaysia retail

sector at Bandar Sunway Shopping Mall Selangor indicated that working conditions

are the most significant in motivating sales personnel followed by recognition

company policy and salary (Tan amp Arona 2011)

12 Problem Statement

The study conducted by Aon Hewitts (2010) showed that the average overall

tumover rate (including voluntary and involuntary) for participating organizations is

157 percent for 2010 Furthennore the voluntary tumover rate for Malaysia has

increased from 101 in 2009 to 13 in 2010 It is hard to retain the workers with

the characteristic of job loyalty in non-manufacturing sectors as 75 of the

supervisor level will hops their jobs within a year stated by Goh (2012)

The Star Newspaper (Feb 19 2012) reported that in non-manufacturing sectors

some employsrs have to replace 75 of their executives who switch jobs within a

year According to Malaysian Employers Federation (MEF) executive director

Shamsuddin Bardan indicated that it cost an employer an average RM25 000 to

RM30 000 to replace each employee who quit The cost for it includes advertising

interview screening background checks training and medical check-up Hence

9

retaining an employee is a challenging task for an employer Private companies face

trouble if there is a shortage of employees to contribute to the companies

Malaysia is lagging behind in the war for talent even though our country has made

various efforts to retain and attract the talent in the country The Talent Roadmap

2020 launched by Prime Minister Datuk Seri Najib Razak has the following

objectives optimising Malaysian talent attracting and facilitating global talent and

building a network of top talent Lim (2012) a reporter from Sin Chiew Daily

mentioned that there used to be 200 talents (graduates on government scholarship)

returned and served in various government department but only one stayed after five

years

Since our nation gained independence our nation has experienced a tremendous

increase in our living standards We lead a comfortable life And the price to pay for

higher living standards will be higher cost of living The educated youngsters who

prefer to enjoy their lives are willing to spend the expenses on entertainments They

are different from their previous generations who would rather keep and save their

money to give better environment for their next generations

The Malaysian Trades Union Congress (MTUC) secretary-general Abdul Halim

Mansor pointed out that the rising cost of living could result in high turnover rate

among workers When their salaries cannot meet the cost of living they will start

hunting for a better-paying job Moreover the scenarios usually occur to semishy

10

skilled workers if compared with less skilled workers who work on the production

floor Therefore the turnover rate is increasing with the rise of the living cost

Engaging talented personnel is proven to be a difficult task for private employers

because heshe determines the survival and development of the company in this

competitive economic environment Each employee might have different need that

the employer should try to accommodate in order to prevent job hopping

In order words it is hard to establish staff loyalty as there are many intrinsic and

extrinsic factors that influence the individuals decision to leave a company such as

the personal factors job factors and benefits factors For instance culture

management level and the workforce environment of an organisation might be

another issue of influencing the turnover rate of a company

Lower emotional exhaustion more support from the school and higher job

satisfaction are needed to keep the music teachers in school The survey of 93 music

teachers from private music schools around Klang Valley in Malaysia indicated that

the support from the music schools high job satisfaction and low emotional

exhaustion apd pressure of teaching will likely prevent them from job hopping

(Wong amp Tay 2010)

A committed employee who has high job involvement and job satisfaction will less

likely to leave the firm The questionnaire survey conducted on 116 Information

Systems (IS) personnel working in multinational companies in Malaysia showed that

11

IS personnels job involvement and jobs satisfaction that are positively related to

organizational commitment have significant impact on their tendency to leave a job

(Teh amp Tritos 2011)

13 Research Objectives

The purposes of this study are to in context of employees working at Sibu to

examine the relationship between job satisfaction (intrinsicmotivation factors and

extrinsichygiene factors) towards employee retention Besides that the research

objective IS to investigate

(intrinsicmotivation factors and

retention

the

ext

relationship

rinsichygiene

between

factors)

job

towards

satisfaction

employee

14 Research Questions

The study is to address as the questions in context of employees working at Sibu

The first qu~stion is about What is the relationship the relationship between job

satisfaction and employee retention The second question is determined What is

the relationship between the extrinsichygiene factors and intrinsicmotivation factors

of job satisfaction and employee retention Lastly the question of What is the

most important factor in detennining the employee retention of the private sectors in

Sibu Sarawak Malaysia

12

15 Definition of Key Terms

Employee Engagement

Employee engagement- Kahn (1990) claim that utilize the commitment or

contribution of an employee self-governance by their putting their efforts skills and

knowledge towards their works physically cognitively and emotionally from the

start being employed in an organisation

Talent Turnover

Gustafson (2002) defined turnover as the ratio of the number of organizational

members who have left during the period being considered divided by the average

number of people in that organization during that period For managers it means the

entire process associated with filling a vacancy Turnover is also known as the

replacement cycle when a position is vacated each time either voluntarily or

involuntarily a new employee is hired and trained

Job Satisfaction

Job satisfaction is an attitude that individuals have about their jobs It results from

their perception of the degree to which there is good fit between the individual and

the organisation Ivancevich et aI s (1997 p 91) Job satisfaction is also described

as an emotional response towards various facets of ones job such as equitable pay

and working conditions (Kreitner Kinicki amp Buelens 1999)

13

Page 15: JOB SATISFACTION TOWARDS EMPLOYEE RETENTION … Satisfaction Towards Employee... · paper is designed to understand the job satisfaction towards employee retention among ... questionnaire

The quality of the service of the service industries can be influenced by employees

job satisfaction and commitment to the organisation The research on th6 influence

of organizational commitment and job satisfaction on service quality of customer-

contact employees in banking call centres (sample size 342 employees in four

telephone call centres of a major UK retail bank) showed that job satisfaction and

organizational commitment of employees can significantly affect the quality of the

service offered (Malhotra amp Mukherjee 2004)

In the teaching profession the teachers demanded for better wages working hours

and day-off related to the career The study on job satisfaction among school

teachers in Cyprus using a sample of 461 teachers and administrators (adapted

version of questionnaire Teacher 2000 Project) claimed that Cypriot teachers chose

this career due to the salary the working hours and the holidays associated with this

profession (Zembylas amp Papanastasiou 2005)

Supervision is another area that is being studied in order to improve the job

satisfaction of the employees The survey carried out on 927 respondents on the job

satisfaction in a stable child welfare workforce found out that supervision

experiencing difficulties with working conditions lack of external client resources

length of employment and being a supervisor can be the highest predictors of job

dissatisfaction (Strand amp Dore 2008)

4

Pusat Khidmat MakJumat Akademik UNlVERSm MALAYSIA SARAWAK

Although the hotel and tourism industry is flourishing the industry faced human

resource challenges The major challenges are employee retention human resource

shortages shortages of qualified managers and the expectations gap between

education and industry (Zhang amp Wu 2004) In short the difficulty of looking for a

suitable candidate for a duty makes staff turnover an urgent issue that needed to be

tackled

Researchers have been searching for the causes of staff turnover According to

Gustafson (2002) the five most cited internal causes of turnover were rate of pay

communication problems lack of advancement oppOltunities lack of recognition for

a job well done and conflict with management while the five most cited external

causes of turnover were better pay elsewhere increases of pay in other industries

low unemployment a strong local or regional economy and low quality of

employees overall

In the academic setting there are a number of factors that can affect the retention of

the academic staff Arulkumaran (1999) claimed that the economic standings

quantum of clinical work numeration retirement age facilities for research criteria

for promotion health care delivery system the financial system and the outlook of 01

the universities which operate differently in South-East Asian countries can

determine the recruitment and retention of academic staff

5

Company policy has been explored to determine its effect on staff retention

Although environmental factors such as local labour markets and individual

employee variables can affect labour turnover organizational factors (company

culture and values) and management behaviour (operational and control variables)

have significantly effect on staff retention rate in retail industry (Booth amp Hamer

2007)

The results from the decision trees using the sample data from a questionnaire survey

of 237 managers in Singapore showed that there is positive significantly association

between ethical culture constructs (top management support for ethical behaviour

and the association between ethical behaviour and career success within the

organization) and job satisfaction It also supp0l1ed that job satisfaction was

positively related to organizational commitment (Koh amp Boh 2004)

Improving employee job satisfaction and staff retention may be able to enhance

customer satisfaction In health care facilities the research on employee satisfaction

and employee retention as catalysts to patient satisfaction illustrated that focusing on

employee satisfaction and subsequently employee retention could be the catalysts to

patient satisfaction (Collins et aI 2008)

6

111 The Malaysian Scenario

As Malaysia strived to upgrade from a middle income nation to a high Income

country In order to achieve the targets of Wawasan 2020 her reliance on

productivity and irulOvation to drive economic growth has become even greater

Under the 10th Malaysia Plan talent management had been identified as the key to

succeed (Baharin et aI 201l)

Compared to working population China the Malaysians upheld different values in

workplace Although the tendency to quit is affected by the vvorkers key-degree

performance visibility off-job recompense and reward fairness in China the staff

turnover rate among Malaysians is influenced by the current management for

retaining talents job-coupling and equity of rewards that may impact the talents job

satisfaction and organizational commitment (Zheng et aI 2009)

It is difficult to find the proper talent that can carry out the duty properly in a firm

especially in the service industry The 2-Phase survey (169 human resource

managers from service companies) that investigated the gap between cooperate

needs and availability of skills and attributes among the talent pool of Malaysia

service found out that there was a gap between i~dustry needs and the availability of

important competencies within the pool of prospective workers The service industry

looked for those with competencies in communication information technology

customer relationship management and exhibited high motivation and career

7

commitment (Downe et ai 2012) This reiterated the importance of retaining the

skillful staff in a finn

Organizational justice as part of company policy is important in detennining the

Malaysian job satisfaction and tumover intention Based on the finding on the impact

of organizational justice on employees jobs satisfaction in Klang Valley Malaysia

the high level of employees perception towards faimess to means used to detennine

outcomes (procedural justice) and faimess of the outcomes employees receive

(distributive justice) can increase the level of employees job satisfaction

organizational commitment and reduce tumover intention (Choong et aI 20 II)

Another component of company policy - management is also essential in shaping the

job satisfaction among Malaysians The study on the job satisfaction level among

human resource employees in Malaysia by investigating employee relationship with

management compensation and benefits and working environment as independent

variables to job satisfaction demonstrated that the employee relationship with

management has greater influence on job satisfaction than the other variables

compensation and benefits and working environment (Teoh et ai 2011)

The role of supervision that can affect the job satisfaction in Malaysia cannot be

ignored The result from the study on the impact of mentoring and job satisfaction in

Malaysian SMEs revealed that career mentoring has positive relationship with all

dimensions of job satisfaction studies co-workers job itself promotions and

supervisors (Lo amp Ramayah 2011)

8

Furthennore the employers need to pay attention to the working condition as part of

the dimension of job satisfaction to retain their high perfonners The research that

uses Herzbergs motivation-hygiene theory and job satisfaction in Malaysia retail

sector at Bandar Sunway Shopping Mall Selangor indicated that working conditions

are the most significant in motivating sales personnel followed by recognition

company policy and salary (Tan amp Arona 2011)

12 Problem Statement

The study conducted by Aon Hewitts (2010) showed that the average overall

tumover rate (including voluntary and involuntary) for participating organizations is

157 percent for 2010 Furthennore the voluntary tumover rate for Malaysia has

increased from 101 in 2009 to 13 in 2010 It is hard to retain the workers with

the characteristic of job loyalty in non-manufacturing sectors as 75 of the

supervisor level will hops their jobs within a year stated by Goh (2012)

The Star Newspaper (Feb 19 2012) reported that in non-manufacturing sectors

some employsrs have to replace 75 of their executives who switch jobs within a

year According to Malaysian Employers Federation (MEF) executive director

Shamsuddin Bardan indicated that it cost an employer an average RM25 000 to

RM30 000 to replace each employee who quit The cost for it includes advertising

interview screening background checks training and medical check-up Hence

9

retaining an employee is a challenging task for an employer Private companies face

trouble if there is a shortage of employees to contribute to the companies

Malaysia is lagging behind in the war for talent even though our country has made

various efforts to retain and attract the talent in the country The Talent Roadmap

2020 launched by Prime Minister Datuk Seri Najib Razak has the following

objectives optimising Malaysian talent attracting and facilitating global talent and

building a network of top talent Lim (2012) a reporter from Sin Chiew Daily

mentioned that there used to be 200 talents (graduates on government scholarship)

returned and served in various government department but only one stayed after five

years

Since our nation gained independence our nation has experienced a tremendous

increase in our living standards We lead a comfortable life And the price to pay for

higher living standards will be higher cost of living The educated youngsters who

prefer to enjoy their lives are willing to spend the expenses on entertainments They

are different from their previous generations who would rather keep and save their

money to give better environment for their next generations

The Malaysian Trades Union Congress (MTUC) secretary-general Abdul Halim

Mansor pointed out that the rising cost of living could result in high turnover rate

among workers When their salaries cannot meet the cost of living they will start

hunting for a better-paying job Moreover the scenarios usually occur to semishy

10

skilled workers if compared with less skilled workers who work on the production

floor Therefore the turnover rate is increasing with the rise of the living cost

Engaging talented personnel is proven to be a difficult task for private employers

because heshe determines the survival and development of the company in this

competitive economic environment Each employee might have different need that

the employer should try to accommodate in order to prevent job hopping

In order words it is hard to establish staff loyalty as there are many intrinsic and

extrinsic factors that influence the individuals decision to leave a company such as

the personal factors job factors and benefits factors For instance culture

management level and the workforce environment of an organisation might be

another issue of influencing the turnover rate of a company

Lower emotional exhaustion more support from the school and higher job

satisfaction are needed to keep the music teachers in school The survey of 93 music

teachers from private music schools around Klang Valley in Malaysia indicated that

the support from the music schools high job satisfaction and low emotional

exhaustion apd pressure of teaching will likely prevent them from job hopping

(Wong amp Tay 2010)

A committed employee who has high job involvement and job satisfaction will less

likely to leave the firm The questionnaire survey conducted on 116 Information

Systems (IS) personnel working in multinational companies in Malaysia showed that

11

IS personnels job involvement and jobs satisfaction that are positively related to

organizational commitment have significant impact on their tendency to leave a job

(Teh amp Tritos 2011)

13 Research Objectives

The purposes of this study are to in context of employees working at Sibu to

examine the relationship between job satisfaction (intrinsicmotivation factors and

extrinsichygiene factors) towards employee retention Besides that the research

objective IS to investigate

(intrinsicmotivation factors and

retention

the

ext

relationship

rinsichygiene

between

factors)

job

towards

satisfaction

employee

14 Research Questions

The study is to address as the questions in context of employees working at Sibu

The first qu~stion is about What is the relationship the relationship between job

satisfaction and employee retention The second question is determined What is

the relationship between the extrinsichygiene factors and intrinsicmotivation factors

of job satisfaction and employee retention Lastly the question of What is the

most important factor in detennining the employee retention of the private sectors in

Sibu Sarawak Malaysia

12

15 Definition of Key Terms

Employee Engagement

Employee engagement- Kahn (1990) claim that utilize the commitment or

contribution of an employee self-governance by their putting their efforts skills and

knowledge towards their works physically cognitively and emotionally from the

start being employed in an organisation

Talent Turnover

Gustafson (2002) defined turnover as the ratio of the number of organizational

members who have left during the period being considered divided by the average

number of people in that organization during that period For managers it means the

entire process associated with filling a vacancy Turnover is also known as the

replacement cycle when a position is vacated each time either voluntarily or

involuntarily a new employee is hired and trained

Job Satisfaction

Job satisfaction is an attitude that individuals have about their jobs It results from

their perception of the degree to which there is good fit between the individual and

the organisation Ivancevich et aI s (1997 p 91) Job satisfaction is also described

as an emotional response towards various facets of ones job such as equitable pay

and working conditions (Kreitner Kinicki amp Buelens 1999)

13

Page 16: JOB SATISFACTION TOWARDS EMPLOYEE RETENTION … Satisfaction Towards Employee... · paper is designed to understand the job satisfaction towards employee retention among ... questionnaire

Pusat Khidmat MakJumat Akademik UNlVERSm MALAYSIA SARAWAK

Although the hotel and tourism industry is flourishing the industry faced human

resource challenges The major challenges are employee retention human resource

shortages shortages of qualified managers and the expectations gap between

education and industry (Zhang amp Wu 2004) In short the difficulty of looking for a

suitable candidate for a duty makes staff turnover an urgent issue that needed to be

tackled

Researchers have been searching for the causes of staff turnover According to

Gustafson (2002) the five most cited internal causes of turnover were rate of pay

communication problems lack of advancement oppOltunities lack of recognition for

a job well done and conflict with management while the five most cited external

causes of turnover were better pay elsewhere increases of pay in other industries

low unemployment a strong local or regional economy and low quality of

employees overall

In the academic setting there are a number of factors that can affect the retention of

the academic staff Arulkumaran (1999) claimed that the economic standings

quantum of clinical work numeration retirement age facilities for research criteria

for promotion health care delivery system the financial system and the outlook of 01

the universities which operate differently in South-East Asian countries can

determine the recruitment and retention of academic staff

5

Company policy has been explored to determine its effect on staff retention

Although environmental factors such as local labour markets and individual

employee variables can affect labour turnover organizational factors (company

culture and values) and management behaviour (operational and control variables)

have significantly effect on staff retention rate in retail industry (Booth amp Hamer

2007)

The results from the decision trees using the sample data from a questionnaire survey

of 237 managers in Singapore showed that there is positive significantly association

between ethical culture constructs (top management support for ethical behaviour

and the association between ethical behaviour and career success within the

organization) and job satisfaction It also supp0l1ed that job satisfaction was

positively related to organizational commitment (Koh amp Boh 2004)

Improving employee job satisfaction and staff retention may be able to enhance

customer satisfaction In health care facilities the research on employee satisfaction

and employee retention as catalysts to patient satisfaction illustrated that focusing on

employee satisfaction and subsequently employee retention could be the catalysts to

patient satisfaction (Collins et aI 2008)

6

111 The Malaysian Scenario

As Malaysia strived to upgrade from a middle income nation to a high Income

country In order to achieve the targets of Wawasan 2020 her reliance on

productivity and irulOvation to drive economic growth has become even greater

Under the 10th Malaysia Plan talent management had been identified as the key to

succeed (Baharin et aI 201l)

Compared to working population China the Malaysians upheld different values in

workplace Although the tendency to quit is affected by the vvorkers key-degree

performance visibility off-job recompense and reward fairness in China the staff

turnover rate among Malaysians is influenced by the current management for

retaining talents job-coupling and equity of rewards that may impact the talents job

satisfaction and organizational commitment (Zheng et aI 2009)

It is difficult to find the proper talent that can carry out the duty properly in a firm

especially in the service industry The 2-Phase survey (169 human resource

managers from service companies) that investigated the gap between cooperate

needs and availability of skills and attributes among the talent pool of Malaysia

service found out that there was a gap between i~dustry needs and the availability of

important competencies within the pool of prospective workers The service industry

looked for those with competencies in communication information technology

customer relationship management and exhibited high motivation and career

7

commitment (Downe et ai 2012) This reiterated the importance of retaining the

skillful staff in a finn

Organizational justice as part of company policy is important in detennining the

Malaysian job satisfaction and tumover intention Based on the finding on the impact

of organizational justice on employees jobs satisfaction in Klang Valley Malaysia

the high level of employees perception towards faimess to means used to detennine

outcomes (procedural justice) and faimess of the outcomes employees receive

(distributive justice) can increase the level of employees job satisfaction

organizational commitment and reduce tumover intention (Choong et aI 20 II)

Another component of company policy - management is also essential in shaping the

job satisfaction among Malaysians The study on the job satisfaction level among

human resource employees in Malaysia by investigating employee relationship with

management compensation and benefits and working environment as independent

variables to job satisfaction demonstrated that the employee relationship with

management has greater influence on job satisfaction than the other variables

compensation and benefits and working environment (Teoh et ai 2011)

The role of supervision that can affect the job satisfaction in Malaysia cannot be

ignored The result from the study on the impact of mentoring and job satisfaction in

Malaysian SMEs revealed that career mentoring has positive relationship with all

dimensions of job satisfaction studies co-workers job itself promotions and

supervisors (Lo amp Ramayah 2011)

8

Furthennore the employers need to pay attention to the working condition as part of

the dimension of job satisfaction to retain their high perfonners The research that

uses Herzbergs motivation-hygiene theory and job satisfaction in Malaysia retail

sector at Bandar Sunway Shopping Mall Selangor indicated that working conditions

are the most significant in motivating sales personnel followed by recognition

company policy and salary (Tan amp Arona 2011)

12 Problem Statement

The study conducted by Aon Hewitts (2010) showed that the average overall

tumover rate (including voluntary and involuntary) for participating organizations is

157 percent for 2010 Furthennore the voluntary tumover rate for Malaysia has

increased from 101 in 2009 to 13 in 2010 It is hard to retain the workers with

the characteristic of job loyalty in non-manufacturing sectors as 75 of the

supervisor level will hops their jobs within a year stated by Goh (2012)

The Star Newspaper (Feb 19 2012) reported that in non-manufacturing sectors

some employsrs have to replace 75 of their executives who switch jobs within a

year According to Malaysian Employers Federation (MEF) executive director

Shamsuddin Bardan indicated that it cost an employer an average RM25 000 to

RM30 000 to replace each employee who quit The cost for it includes advertising

interview screening background checks training and medical check-up Hence

9

retaining an employee is a challenging task for an employer Private companies face

trouble if there is a shortage of employees to contribute to the companies

Malaysia is lagging behind in the war for talent even though our country has made

various efforts to retain and attract the talent in the country The Talent Roadmap

2020 launched by Prime Minister Datuk Seri Najib Razak has the following

objectives optimising Malaysian talent attracting and facilitating global talent and

building a network of top talent Lim (2012) a reporter from Sin Chiew Daily

mentioned that there used to be 200 talents (graduates on government scholarship)

returned and served in various government department but only one stayed after five

years

Since our nation gained independence our nation has experienced a tremendous

increase in our living standards We lead a comfortable life And the price to pay for

higher living standards will be higher cost of living The educated youngsters who

prefer to enjoy their lives are willing to spend the expenses on entertainments They

are different from their previous generations who would rather keep and save their

money to give better environment for their next generations

The Malaysian Trades Union Congress (MTUC) secretary-general Abdul Halim

Mansor pointed out that the rising cost of living could result in high turnover rate

among workers When their salaries cannot meet the cost of living they will start

hunting for a better-paying job Moreover the scenarios usually occur to semishy

10

skilled workers if compared with less skilled workers who work on the production

floor Therefore the turnover rate is increasing with the rise of the living cost

Engaging talented personnel is proven to be a difficult task for private employers

because heshe determines the survival and development of the company in this

competitive economic environment Each employee might have different need that

the employer should try to accommodate in order to prevent job hopping

In order words it is hard to establish staff loyalty as there are many intrinsic and

extrinsic factors that influence the individuals decision to leave a company such as

the personal factors job factors and benefits factors For instance culture

management level and the workforce environment of an organisation might be

another issue of influencing the turnover rate of a company

Lower emotional exhaustion more support from the school and higher job

satisfaction are needed to keep the music teachers in school The survey of 93 music

teachers from private music schools around Klang Valley in Malaysia indicated that

the support from the music schools high job satisfaction and low emotional

exhaustion apd pressure of teaching will likely prevent them from job hopping

(Wong amp Tay 2010)

A committed employee who has high job involvement and job satisfaction will less

likely to leave the firm The questionnaire survey conducted on 116 Information

Systems (IS) personnel working in multinational companies in Malaysia showed that

11

IS personnels job involvement and jobs satisfaction that are positively related to

organizational commitment have significant impact on their tendency to leave a job

(Teh amp Tritos 2011)

13 Research Objectives

The purposes of this study are to in context of employees working at Sibu to

examine the relationship between job satisfaction (intrinsicmotivation factors and

extrinsichygiene factors) towards employee retention Besides that the research

objective IS to investigate

(intrinsicmotivation factors and

retention

the

ext

relationship

rinsichygiene

between

factors)

job

towards

satisfaction

employee

14 Research Questions

The study is to address as the questions in context of employees working at Sibu

The first qu~stion is about What is the relationship the relationship between job

satisfaction and employee retention The second question is determined What is

the relationship between the extrinsichygiene factors and intrinsicmotivation factors

of job satisfaction and employee retention Lastly the question of What is the

most important factor in detennining the employee retention of the private sectors in

Sibu Sarawak Malaysia

12

15 Definition of Key Terms

Employee Engagement

Employee engagement- Kahn (1990) claim that utilize the commitment or

contribution of an employee self-governance by their putting their efforts skills and

knowledge towards their works physically cognitively and emotionally from the

start being employed in an organisation

Talent Turnover

Gustafson (2002) defined turnover as the ratio of the number of organizational

members who have left during the period being considered divided by the average

number of people in that organization during that period For managers it means the

entire process associated with filling a vacancy Turnover is also known as the

replacement cycle when a position is vacated each time either voluntarily or

involuntarily a new employee is hired and trained

Job Satisfaction

Job satisfaction is an attitude that individuals have about their jobs It results from

their perception of the degree to which there is good fit between the individual and

the organisation Ivancevich et aI s (1997 p 91) Job satisfaction is also described

as an emotional response towards various facets of ones job such as equitable pay

and working conditions (Kreitner Kinicki amp Buelens 1999)

13

Page 17: JOB SATISFACTION TOWARDS EMPLOYEE RETENTION … Satisfaction Towards Employee... · paper is designed to understand the job satisfaction towards employee retention among ... questionnaire

Company policy has been explored to determine its effect on staff retention

Although environmental factors such as local labour markets and individual

employee variables can affect labour turnover organizational factors (company

culture and values) and management behaviour (operational and control variables)

have significantly effect on staff retention rate in retail industry (Booth amp Hamer

2007)

The results from the decision trees using the sample data from a questionnaire survey

of 237 managers in Singapore showed that there is positive significantly association

between ethical culture constructs (top management support for ethical behaviour

and the association between ethical behaviour and career success within the

organization) and job satisfaction It also supp0l1ed that job satisfaction was

positively related to organizational commitment (Koh amp Boh 2004)

Improving employee job satisfaction and staff retention may be able to enhance

customer satisfaction In health care facilities the research on employee satisfaction

and employee retention as catalysts to patient satisfaction illustrated that focusing on

employee satisfaction and subsequently employee retention could be the catalysts to

patient satisfaction (Collins et aI 2008)

6

111 The Malaysian Scenario

As Malaysia strived to upgrade from a middle income nation to a high Income

country In order to achieve the targets of Wawasan 2020 her reliance on

productivity and irulOvation to drive economic growth has become even greater

Under the 10th Malaysia Plan talent management had been identified as the key to

succeed (Baharin et aI 201l)

Compared to working population China the Malaysians upheld different values in

workplace Although the tendency to quit is affected by the vvorkers key-degree

performance visibility off-job recompense and reward fairness in China the staff

turnover rate among Malaysians is influenced by the current management for

retaining talents job-coupling and equity of rewards that may impact the talents job

satisfaction and organizational commitment (Zheng et aI 2009)

It is difficult to find the proper talent that can carry out the duty properly in a firm

especially in the service industry The 2-Phase survey (169 human resource

managers from service companies) that investigated the gap between cooperate

needs and availability of skills and attributes among the talent pool of Malaysia

service found out that there was a gap between i~dustry needs and the availability of

important competencies within the pool of prospective workers The service industry

looked for those with competencies in communication information technology

customer relationship management and exhibited high motivation and career

7

commitment (Downe et ai 2012) This reiterated the importance of retaining the

skillful staff in a finn

Organizational justice as part of company policy is important in detennining the

Malaysian job satisfaction and tumover intention Based on the finding on the impact

of organizational justice on employees jobs satisfaction in Klang Valley Malaysia

the high level of employees perception towards faimess to means used to detennine

outcomes (procedural justice) and faimess of the outcomes employees receive

(distributive justice) can increase the level of employees job satisfaction

organizational commitment and reduce tumover intention (Choong et aI 20 II)

Another component of company policy - management is also essential in shaping the

job satisfaction among Malaysians The study on the job satisfaction level among

human resource employees in Malaysia by investigating employee relationship with

management compensation and benefits and working environment as independent

variables to job satisfaction demonstrated that the employee relationship with

management has greater influence on job satisfaction than the other variables

compensation and benefits and working environment (Teoh et ai 2011)

The role of supervision that can affect the job satisfaction in Malaysia cannot be

ignored The result from the study on the impact of mentoring and job satisfaction in

Malaysian SMEs revealed that career mentoring has positive relationship with all

dimensions of job satisfaction studies co-workers job itself promotions and

supervisors (Lo amp Ramayah 2011)

8

Furthennore the employers need to pay attention to the working condition as part of

the dimension of job satisfaction to retain their high perfonners The research that

uses Herzbergs motivation-hygiene theory and job satisfaction in Malaysia retail

sector at Bandar Sunway Shopping Mall Selangor indicated that working conditions

are the most significant in motivating sales personnel followed by recognition

company policy and salary (Tan amp Arona 2011)

12 Problem Statement

The study conducted by Aon Hewitts (2010) showed that the average overall

tumover rate (including voluntary and involuntary) for participating organizations is

157 percent for 2010 Furthennore the voluntary tumover rate for Malaysia has

increased from 101 in 2009 to 13 in 2010 It is hard to retain the workers with

the characteristic of job loyalty in non-manufacturing sectors as 75 of the

supervisor level will hops their jobs within a year stated by Goh (2012)

The Star Newspaper (Feb 19 2012) reported that in non-manufacturing sectors

some employsrs have to replace 75 of their executives who switch jobs within a

year According to Malaysian Employers Federation (MEF) executive director

Shamsuddin Bardan indicated that it cost an employer an average RM25 000 to

RM30 000 to replace each employee who quit The cost for it includes advertising

interview screening background checks training and medical check-up Hence

9

retaining an employee is a challenging task for an employer Private companies face

trouble if there is a shortage of employees to contribute to the companies

Malaysia is lagging behind in the war for talent even though our country has made

various efforts to retain and attract the talent in the country The Talent Roadmap

2020 launched by Prime Minister Datuk Seri Najib Razak has the following

objectives optimising Malaysian talent attracting and facilitating global talent and

building a network of top talent Lim (2012) a reporter from Sin Chiew Daily

mentioned that there used to be 200 talents (graduates on government scholarship)

returned and served in various government department but only one stayed after five

years

Since our nation gained independence our nation has experienced a tremendous

increase in our living standards We lead a comfortable life And the price to pay for

higher living standards will be higher cost of living The educated youngsters who

prefer to enjoy their lives are willing to spend the expenses on entertainments They

are different from their previous generations who would rather keep and save their

money to give better environment for their next generations

The Malaysian Trades Union Congress (MTUC) secretary-general Abdul Halim

Mansor pointed out that the rising cost of living could result in high turnover rate

among workers When their salaries cannot meet the cost of living they will start

hunting for a better-paying job Moreover the scenarios usually occur to semishy

10

skilled workers if compared with less skilled workers who work on the production

floor Therefore the turnover rate is increasing with the rise of the living cost

Engaging talented personnel is proven to be a difficult task for private employers

because heshe determines the survival and development of the company in this

competitive economic environment Each employee might have different need that

the employer should try to accommodate in order to prevent job hopping

In order words it is hard to establish staff loyalty as there are many intrinsic and

extrinsic factors that influence the individuals decision to leave a company such as

the personal factors job factors and benefits factors For instance culture

management level and the workforce environment of an organisation might be

another issue of influencing the turnover rate of a company

Lower emotional exhaustion more support from the school and higher job

satisfaction are needed to keep the music teachers in school The survey of 93 music

teachers from private music schools around Klang Valley in Malaysia indicated that

the support from the music schools high job satisfaction and low emotional

exhaustion apd pressure of teaching will likely prevent them from job hopping

(Wong amp Tay 2010)

A committed employee who has high job involvement and job satisfaction will less

likely to leave the firm The questionnaire survey conducted on 116 Information

Systems (IS) personnel working in multinational companies in Malaysia showed that

11

IS personnels job involvement and jobs satisfaction that are positively related to

organizational commitment have significant impact on their tendency to leave a job

(Teh amp Tritos 2011)

13 Research Objectives

The purposes of this study are to in context of employees working at Sibu to

examine the relationship between job satisfaction (intrinsicmotivation factors and

extrinsichygiene factors) towards employee retention Besides that the research

objective IS to investigate

(intrinsicmotivation factors and

retention

the

ext

relationship

rinsichygiene

between

factors)

job

towards

satisfaction

employee

14 Research Questions

The study is to address as the questions in context of employees working at Sibu

The first qu~stion is about What is the relationship the relationship between job

satisfaction and employee retention The second question is determined What is

the relationship between the extrinsichygiene factors and intrinsicmotivation factors

of job satisfaction and employee retention Lastly the question of What is the

most important factor in detennining the employee retention of the private sectors in

Sibu Sarawak Malaysia

12

15 Definition of Key Terms

Employee Engagement

Employee engagement- Kahn (1990) claim that utilize the commitment or

contribution of an employee self-governance by their putting their efforts skills and

knowledge towards their works physically cognitively and emotionally from the

start being employed in an organisation

Talent Turnover

Gustafson (2002) defined turnover as the ratio of the number of organizational

members who have left during the period being considered divided by the average

number of people in that organization during that period For managers it means the

entire process associated with filling a vacancy Turnover is also known as the

replacement cycle when a position is vacated each time either voluntarily or

involuntarily a new employee is hired and trained

Job Satisfaction

Job satisfaction is an attitude that individuals have about their jobs It results from

their perception of the degree to which there is good fit between the individual and

the organisation Ivancevich et aI s (1997 p 91) Job satisfaction is also described

as an emotional response towards various facets of ones job such as equitable pay

and working conditions (Kreitner Kinicki amp Buelens 1999)

13

Page 18: JOB SATISFACTION TOWARDS EMPLOYEE RETENTION … Satisfaction Towards Employee... · paper is designed to understand the job satisfaction towards employee retention among ... questionnaire

111 The Malaysian Scenario

As Malaysia strived to upgrade from a middle income nation to a high Income

country In order to achieve the targets of Wawasan 2020 her reliance on

productivity and irulOvation to drive economic growth has become even greater

Under the 10th Malaysia Plan talent management had been identified as the key to

succeed (Baharin et aI 201l)

Compared to working population China the Malaysians upheld different values in

workplace Although the tendency to quit is affected by the vvorkers key-degree

performance visibility off-job recompense and reward fairness in China the staff

turnover rate among Malaysians is influenced by the current management for

retaining talents job-coupling and equity of rewards that may impact the talents job

satisfaction and organizational commitment (Zheng et aI 2009)

It is difficult to find the proper talent that can carry out the duty properly in a firm

especially in the service industry The 2-Phase survey (169 human resource

managers from service companies) that investigated the gap between cooperate

needs and availability of skills and attributes among the talent pool of Malaysia

service found out that there was a gap between i~dustry needs and the availability of

important competencies within the pool of prospective workers The service industry

looked for those with competencies in communication information technology

customer relationship management and exhibited high motivation and career

7

commitment (Downe et ai 2012) This reiterated the importance of retaining the

skillful staff in a finn

Organizational justice as part of company policy is important in detennining the

Malaysian job satisfaction and tumover intention Based on the finding on the impact

of organizational justice on employees jobs satisfaction in Klang Valley Malaysia

the high level of employees perception towards faimess to means used to detennine

outcomes (procedural justice) and faimess of the outcomes employees receive

(distributive justice) can increase the level of employees job satisfaction

organizational commitment and reduce tumover intention (Choong et aI 20 II)

Another component of company policy - management is also essential in shaping the

job satisfaction among Malaysians The study on the job satisfaction level among

human resource employees in Malaysia by investigating employee relationship with

management compensation and benefits and working environment as independent

variables to job satisfaction demonstrated that the employee relationship with

management has greater influence on job satisfaction than the other variables

compensation and benefits and working environment (Teoh et ai 2011)

The role of supervision that can affect the job satisfaction in Malaysia cannot be

ignored The result from the study on the impact of mentoring and job satisfaction in

Malaysian SMEs revealed that career mentoring has positive relationship with all

dimensions of job satisfaction studies co-workers job itself promotions and

supervisors (Lo amp Ramayah 2011)

8

Furthennore the employers need to pay attention to the working condition as part of

the dimension of job satisfaction to retain their high perfonners The research that

uses Herzbergs motivation-hygiene theory and job satisfaction in Malaysia retail

sector at Bandar Sunway Shopping Mall Selangor indicated that working conditions

are the most significant in motivating sales personnel followed by recognition

company policy and salary (Tan amp Arona 2011)

12 Problem Statement

The study conducted by Aon Hewitts (2010) showed that the average overall

tumover rate (including voluntary and involuntary) for participating organizations is

157 percent for 2010 Furthennore the voluntary tumover rate for Malaysia has

increased from 101 in 2009 to 13 in 2010 It is hard to retain the workers with

the characteristic of job loyalty in non-manufacturing sectors as 75 of the

supervisor level will hops their jobs within a year stated by Goh (2012)

The Star Newspaper (Feb 19 2012) reported that in non-manufacturing sectors

some employsrs have to replace 75 of their executives who switch jobs within a

year According to Malaysian Employers Federation (MEF) executive director

Shamsuddin Bardan indicated that it cost an employer an average RM25 000 to

RM30 000 to replace each employee who quit The cost for it includes advertising

interview screening background checks training and medical check-up Hence

9

retaining an employee is a challenging task for an employer Private companies face

trouble if there is a shortage of employees to contribute to the companies

Malaysia is lagging behind in the war for talent even though our country has made

various efforts to retain and attract the talent in the country The Talent Roadmap

2020 launched by Prime Minister Datuk Seri Najib Razak has the following

objectives optimising Malaysian talent attracting and facilitating global talent and

building a network of top talent Lim (2012) a reporter from Sin Chiew Daily

mentioned that there used to be 200 talents (graduates on government scholarship)

returned and served in various government department but only one stayed after five

years

Since our nation gained independence our nation has experienced a tremendous

increase in our living standards We lead a comfortable life And the price to pay for

higher living standards will be higher cost of living The educated youngsters who

prefer to enjoy their lives are willing to spend the expenses on entertainments They

are different from their previous generations who would rather keep and save their

money to give better environment for their next generations

The Malaysian Trades Union Congress (MTUC) secretary-general Abdul Halim

Mansor pointed out that the rising cost of living could result in high turnover rate

among workers When their salaries cannot meet the cost of living they will start

hunting for a better-paying job Moreover the scenarios usually occur to semishy

10

skilled workers if compared with less skilled workers who work on the production

floor Therefore the turnover rate is increasing with the rise of the living cost

Engaging talented personnel is proven to be a difficult task for private employers

because heshe determines the survival and development of the company in this

competitive economic environment Each employee might have different need that

the employer should try to accommodate in order to prevent job hopping

In order words it is hard to establish staff loyalty as there are many intrinsic and

extrinsic factors that influence the individuals decision to leave a company such as

the personal factors job factors and benefits factors For instance culture

management level and the workforce environment of an organisation might be

another issue of influencing the turnover rate of a company

Lower emotional exhaustion more support from the school and higher job

satisfaction are needed to keep the music teachers in school The survey of 93 music

teachers from private music schools around Klang Valley in Malaysia indicated that

the support from the music schools high job satisfaction and low emotional

exhaustion apd pressure of teaching will likely prevent them from job hopping

(Wong amp Tay 2010)

A committed employee who has high job involvement and job satisfaction will less

likely to leave the firm The questionnaire survey conducted on 116 Information

Systems (IS) personnel working in multinational companies in Malaysia showed that

11

IS personnels job involvement and jobs satisfaction that are positively related to

organizational commitment have significant impact on their tendency to leave a job

(Teh amp Tritos 2011)

13 Research Objectives

The purposes of this study are to in context of employees working at Sibu to

examine the relationship between job satisfaction (intrinsicmotivation factors and

extrinsichygiene factors) towards employee retention Besides that the research

objective IS to investigate

(intrinsicmotivation factors and

retention

the

ext

relationship

rinsichygiene

between

factors)

job

towards

satisfaction

employee

14 Research Questions

The study is to address as the questions in context of employees working at Sibu

The first qu~stion is about What is the relationship the relationship between job

satisfaction and employee retention The second question is determined What is

the relationship between the extrinsichygiene factors and intrinsicmotivation factors

of job satisfaction and employee retention Lastly the question of What is the

most important factor in detennining the employee retention of the private sectors in

Sibu Sarawak Malaysia

12

15 Definition of Key Terms

Employee Engagement

Employee engagement- Kahn (1990) claim that utilize the commitment or

contribution of an employee self-governance by their putting their efforts skills and

knowledge towards their works physically cognitively and emotionally from the

start being employed in an organisation

Talent Turnover

Gustafson (2002) defined turnover as the ratio of the number of organizational

members who have left during the period being considered divided by the average

number of people in that organization during that period For managers it means the

entire process associated with filling a vacancy Turnover is also known as the

replacement cycle when a position is vacated each time either voluntarily or

involuntarily a new employee is hired and trained

Job Satisfaction

Job satisfaction is an attitude that individuals have about their jobs It results from

their perception of the degree to which there is good fit between the individual and

the organisation Ivancevich et aI s (1997 p 91) Job satisfaction is also described

as an emotional response towards various facets of ones job such as equitable pay

and working conditions (Kreitner Kinicki amp Buelens 1999)

13

Page 19: JOB SATISFACTION TOWARDS EMPLOYEE RETENTION … Satisfaction Towards Employee... · paper is designed to understand the job satisfaction towards employee retention among ... questionnaire

commitment (Downe et ai 2012) This reiterated the importance of retaining the

skillful staff in a finn

Organizational justice as part of company policy is important in detennining the

Malaysian job satisfaction and tumover intention Based on the finding on the impact

of organizational justice on employees jobs satisfaction in Klang Valley Malaysia

the high level of employees perception towards faimess to means used to detennine

outcomes (procedural justice) and faimess of the outcomes employees receive

(distributive justice) can increase the level of employees job satisfaction

organizational commitment and reduce tumover intention (Choong et aI 20 II)

Another component of company policy - management is also essential in shaping the

job satisfaction among Malaysians The study on the job satisfaction level among

human resource employees in Malaysia by investigating employee relationship with

management compensation and benefits and working environment as independent

variables to job satisfaction demonstrated that the employee relationship with

management has greater influence on job satisfaction than the other variables

compensation and benefits and working environment (Teoh et ai 2011)

The role of supervision that can affect the job satisfaction in Malaysia cannot be

ignored The result from the study on the impact of mentoring and job satisfaction in

Malaysian SMEs revealed that career mentoring has positive relationship with all

dimensions of job satisfaction studies co-workers job itself promotions and

supervisors (Lo amp Ramayah 2011)

8

Furthennore the employers need to pay attention to the working condition as part of

the dimension of job satisfaction to retain their high perfonners The research that

uses Herzbergs motivation-hygiene theory and job satisfaction in Malaysia retail

sector at Bandar Sunway Shopping Mall Selangor indicated that working conditions

are the most significant in motivating sales personnel followed by recognition

company policy and salary (Tan amp Arona 2011)

12 Problem Statement

The study conducted by Aon Hewitts (2010) showed that the average overall

tumover rate (including voluntary and involuntary) for participating organizations is

157 percent for 2010 Furthennore the voluntary tumover rate for Malaysia has

increased from 101 in 2009 to 13 in 2010 It is hard to retain the workers with

the characteristic of job loyalty in non-manufacturing sectors as 75 of the

supervisor level will hops their jobs within a year stated by Goh (2012)

The Star Newspaper (Feb 19 2012) reported that in non-manufacturing sectors

some employsrs have to replace 75 of their executives who switch jobs within a

year According to Malaysian Employers Federation (MEF) executive director

Shamsuddin Bardan indicated that it cost an employer an average RM25 000 to

RM30 000 to replace each employee who quit The cost for it includes advertising

interview screening background checks training and medical check-up Hence

9

retaining an employee is a challenging task for an employer Private companies face

trouble if there is a shortage of employees to contribute to the companies

Malaysia is lagging behind in the war for talent even though our country has made

various efforts to retain and attract the talent in the country The Talent Roadmap

2020 launched by Prime Minister Datuk Seri Najib Razak has the following

objectives optimising Malaysian talent attracting and facilitating global talent and

building a network of top talent Lim (2012) a reporter from Sin Chiew Daily

mentioned that there used to be 200 talents (graduates on government scholarship)

returned and served in various government department but only one stayed after five

years

Since our nation gained independence our nation has experienced a tremendous

increase in our living standards We lead a comfortable life And the price to pay for

higher living standards will be higher cost of living The educated youngsters who

prefer to enjoy their lives are willing to spend the expenses on entertainments They

are different from their previous generations who would rather keep and save their

money to give better environment for their next generations

The Malaysian Trades Union Congress (MTUC) secretary-general Abdul Halim

Mansor pointed out that the rising cost of living could result in high turnover rate

among workers When their salaries cannot meet the cost of living they will start

hunting for a better-paying job Moreover the scenarios usually occur to semishy

10

skilled workers if compared with less skilled workers who work on the production

floor Therefore the turnover rate is increasing with the rise of the living cost

Engaging talented personnel is proven to be a difficult task for private employers

because heshe determines the survival and development of the company in this

competitive economic environment Each employee might have different need that

the employer should try to accommodate in order to prevent job hopping

In order words it is hard to establish staff loyalty as there are many intrinsic and

extrinsic factors that influence the individuals decision to leave a company such as

the personal factors job factors and benefits factors For instance culture

management level and the workforce environment of an organisation might be

another issue of influencing the turnover rate of a company

Lower emotional exhaustion more support from the school and higher job

satisfaction are needed to keep the music teachers in school The survey of 93 music

teachers from private music schools around Klang Valley in Malaysia indicated that

the support from the music schools high job satisfaction and low emotional

exhaustion apd pressure of teaching will likely prevent them from job hopping

(Wong amp Tay 2010)

A committed employee who has high job involvement and job satisfaction will less

likely to leave the firm The questionnaire survey conducted on 116 Information

Systems (IS) personnel working in multinational companies in Malaysia showed that

11

IS personnels job involvement and jobs satisfaction that are positively related to

organizational commitment have significant impact on their tendency to leave a job

(Teh amp Tritos 2011)

13 Research Objectives

The purposes of this study are to in context of employees working at Sibu to

examine the relationship between job satisfaction (intrinsicmotivation factors and

extrinsichygiene factors) towards employee retention Besides that the research

objective IS to investigate

(intrinsicmotivation factors and

retention

the

ext

relationship

rinsichygiene

between

factors)

job

towards

satisfaction

employee

14 Research Questions

The study is to address as the questions in context of employees working at Sibu

The first qu~stion is about What is the relationship the relationship between job

satisfaction and employee retention The second question is determined What is

the relationship between the extrinsichygiene factors and intrinsicmotivation factors

of job satisfaction and employee retention Lastly the question of What is the

most important factor in detennining the employee retention of the private sectors in

Sibu Sarawak Malaysia

12

15 Definition of Key Terms

Employee Engagement

Employee engagement- Kahn (1990) claim that utilize the commitment or

contribution of an employee self-governance by their putting their efforts skills and

knowledge towards their works physically cognitively and emotionally from the

start being employed in an organisation

Talent Turnover

Gustafson (2002) defined turnover as the ratio of the number of organizational

members who have left during the period being considered divided by the average

number of people in that organization during that period For managers it means the

entire process associated with filling a vacancy Turnover is also known as the

replacement cycle when a position is vacated each time either voluntarily or

involuntarily a new employee is hired and trained

Job Satisfaction

Job satisfaction is an attitude that individuals have about their jobs It results from

their perception of the degree to which there is good fit between the individual and

the organisation Ivancevich et aI s (1997 p 91) Job satisfaction is also described

as an emotional response towards various facets of ones job such as equitable pay

and working conditions (Kreitner Kinicki amp Buelens 1999)

13

Page 20: JOB SATISFACTION TOWARDS EMPLOYEE RETENTION … Satisfaction Towards Employee... · paper is designed to understand the job satisfaction towards employee retention among ... questionnaire

Furthennore the employers need to pay attention to the working condition as part of

the dimension of job satisfaction to retain their high perfonners The research that

uses Herzbergs motivation-hygiene theory and job satisfaction in Malaysia retail

sector at Bandar Sunway Shopping Mall Selangor indicated that working conditions

are the most significant in motivating sales personnel followed by recognition

company policy and salary (Tan amp Arona 2011)

12 Problem Statement

The study conducted by Aon Hewitts (2010) showed that the average overall

tumover rate (including voluntary and involuntary) for participating organizations is

157 percent for 2010 Furthennore the voluntary tumover rate for Malaysia has

increased from 101 in 2009 to 13 in 2010 It is hard to retain the workers with

the characteristic of job loyalty in non-manufacturing sectors as 75 of the

supervisor level will hops their jobs within a year stated by Goh (2012)

The Star Newspaper (Feb 19 2012) reported that in non-manufacturing sectors

some employsrs have to replace 75 of their executives who switch jobs within a

year According to Malaysian Employers Federation (MEF) executive director

Shamsuddin Bardan indicated that it cost an employer an average RM25 000 to

RM30 000 to replace each employee who quit The cost for it includes advertising

interview screening background checks training and medical check-up Hence

9

retaining an employee is a challenging task for an employer Private companies face

trouble if there is a shortage of employees to contribute to the companies

Malaysia is lagging behind in the war for talent even though our country has made

various efforts to retain and attract the talent in the country The Talent Roadmap

2020 launched by Prime Minister Datuk Seri Najib Razak has the following

objectives optimising Malaysian talent attracting and facilitating global talent and

building a network of top talent Lim (2012) a reporter from Sin Chiew Daily

mentioned that there used to be 200 talents (graduates on government scholarship)

returned and served in various government department but only one stayed after five

years

Since our nation gained independence our nation has experienced a tremendous

increase in our living standards We lead a comfortable life And the price to pay for

higher living standards will be higher cost of living The educated youngsters who

prefer to enjoy their lives are willing to spend the expenses on entertainments They

are different from their previous generations who would rather keep and save their

money to give better environment for their next generations

The Malaysian Trades Union Congress (MTUC) secretary-general Abdul Halim

Mansor pointed out that the rising cost of living could result in high turnover rate

among workers When their salaries cannot meet the cost of living they will start

hunting for a better-paying job Moreover the scenarios usually occur to semishy

10

skilled workers if compared with less skilled workers who work on the production

floor Therefore the turnover rate is increasing with the rise of the living cost

Engaging talented personnel is proven to be a difficult task for private employers

because heshe determines the survival and development of the company in this

competitive economic environment Each employee might have different need that

the employer should try to accommodate in order to prevent job hopping

In order words it is hard to establish staff loyalty as there are many intrinsic and

extrinsic factors that influence the individuals decision to leave a company such as

the personal factors job factors and benefits factors For instance culture

management level and the workforce environment of an organisation might be

another issue of influencing the turnover rate of a company

Lower emotional exhaustion more support from the school and higher job

satisfaction are needed to keep the music teachers in school The survey of 93 music

teachers from private music schools around Klang Valley in Malaysia indicated that

the support from the music schools high job satisfaction and low emotional

exhaustion apd pressure of teaching will likely prevent them from job hopping

(Wong amp Tay 2010)

A committed employee who has high job involvement and job satisfaction will less

likely to leave the firm The questionnaire survey conducted on 116 Information

Systems (IS) personnel working in multinational companies in Malaysia showed that

11

IS personnels job involvement and jobs satisfaction that are positively related to

organizational commitment have significant impact on their tendency to leave a job

(Teh amp Tritos 2011)

13 Research Objectives

The purposes of this study are to in context of employees working at Sibu to

examine the relationship between job satisfaction (intrinsicmotivation factors and

extrinsichygiene factors) towards employee retention Besides that the research

objective IS to investigate

(intrinsicmotivation factors and

retention

the

ext

relationship

rinsichygiene

between

factors)

job

towards

satisfaction

employee

14 Research Questions

The study is to address as the questions in context of employees working at Sibu

The first qu~stion is about What is the relationship the relationship between job

satisfaction and employee retention The second question is determined What is

the relationship between the extrinsichygiene factors and intrinsicmotivation factors

of job satisfaction and employee retention Lastly the question of What is the

most important factor in detennining the employee retention of the private sectors in

Sibu Sarawak Malaysia

12

15 Definition of Key Terms

Employee Engagement

Employee engagement- Kahn (1990) claim that utilize the commitment or

contribution of an employee self-governance by their putting their efforts skills and

knowledge towards their works physically cognitively and emotionally from the

start being employed in an organisation

Talent Turnover

Gustafson (2002) defined turnover as the ratio of the number of organizational

members who have left during the period being considered divided by the average

number of people in that organization during that period For managers it means the

entire process associated with filling a vacancy Turnover is also known as the

replacement cycle when a position is vacated each time either voluntarily or

involuntarily a new employee is hired and trained

Job Satisfaction

Job satisfaction is an attitude that individuals have about their jobs It results from

their perception of the degree to which there is good fit between the individual and

the organisation Ivancevich et aI s (1997 p 91) Job satisfaction is also described

as an emotional response towards various facets of ones job such as equitable pay

and working conditions (Kreitner Kinicki amp Buelens 1999)

13

Page 21: JOB SATISFACTION TOWARDS EMPLOYEE RETENTION … Satisfaction Towards Employee... · paper is designed to understand the job satisfaction towards employee retention among ... questionnaire

retaining an employee is a challenging task for an employer Private companies face

trouble if there is a shortage of employees to contribute to the companies

Malaysia is lagging behind in the war for talent even though our country has made

various efforts to retain and attract the talent in the country The Talent Roadmap

2020 launched by Prime Minister Datuk Seri Najib Razak has the following

objectives optimising Malaysian talent attracting and facilitating global talent and

building a network of top talent Lim (2012) a reporter from Sin Chiew Daily

mentioned that there used to be 200 talents (graduates on government scholarship)

returned and served in various government department but only one stayed after five

years

Since our nation gained independence our nation has experienced a tremendous

increase in our living standards We lead a comfortable life And the price to pay for

higher living standards will be higher cost of living The educated youngsters who

prefer to enjoy their lives are willing to spend the expenses on entertainments They

are different from their previous generations who would rather keep and save their

money to give better environment for their next generations

The Malaysian Trades Union Congress (MTUC) secretary-general Abdul Halim

Mansor pointed out that the rising cost of living could result in high turnover rate

among workers When their salaries cannot meet the cost of living they will start

hunting for a better-paying job Moreover the scenarios usually occur to semishy

10

skilled workers if compared with less skilled workers who work on the production

floor Therefore the turnover rate is increasing with the rise of the living cost

Engaging talented personnel is proven to be a difficult task for private employers

because heshe determines the survival and development of the company in this

competitive economic environment Each employee might have different need that

the employer should try to accommodate in order to prevent job hopping

In order words it is hard to establish staff loyalty as there are many intrinsic and

extrinsic factors that influence the individuals decision to leave a company such as

the personal factors job factors and benefits factors For instance culture

management level and the workforce environment of an organisation might be

another issue of influencing the turnover rate of a company

Lower emotional exhaustion more support from the school and higher job

satisfaction are needed to keep the music teachers in school The survey of 93 music

teachers from private music schools around Klang Valley in Malaysia indicated that

the support from the music schools high job satisfaction and low emotional

exhaustion apd pressure of teaching will likely prevent them from job hopping

(Wong amp Tay 2010)

A committed employee who has high job involvement and job satisfaction will less

likely to leave the firm The questionnaire survey conducted on 116 Information

Systems (IS) personnel working in multinational companies in Malaysia showed that

11

IS personnels job involvement and jobs satisfaction that are positively related to

organizational commitment have significant impact on their tendency to leave a job

(Teh amp Tritos 2011)

13 Research Objectives

The purposes of this study are to in context of employees working at Sibu to

examine the relationship between job satisfaction (intrinsicmotivation factors and

extrinsichygiene factors) towards employee retention Besides that the research

objective IS to investigate

(intrinsicmotivation factors and

retention

the

ext

relationship

rinsichygiene

between

factors)

job

towards

satisfaction

employee

14 Research Questions

The study is to address as the questions in context of employees working at Sibu

The first qu~stion is about What is the relationship the relationship between job

satisfaction and employee retention The second question is determined What is

the relationship between the extrinsichygiene factors and intrinsicmotivation factors

of job satisfaction and employee retention Lastly the question of What is the

most important factor in detennining the employee retention of the private sectors in

Sibu Sarawak Malaysia

12

15 Definition of Key Terms

Employee Engagement

Employee engagement- Kahn (1990) claim that utilize the commitment or

contribution of an employee self-governance by their putting their efforts skills and

knowledge towards their works physically cognitively and emotionally from the

start being employed in an organisation

Talent Turnover

Gustafson (2002) defined turnover as the ratio of the number of organizational

members who have left during the period being considered divided by the average

number of people in that organization during that period For managers it means the

entire process associated with filling a vacancy Turnover is also known as the

replacement cycle when a position is vacated each time either voluntarily or

involuntarily a new employee is hired and trained

Job Satisfaction

Job satisfaction is an attitude that individuals have about their jobs It results from

their perception of the degree to which there is good fit between the individual and

the organisation Ivancevich et aI s (1997 p 91) Job satisfaction is also described

as an emotional response towards various facets of ones job such as equitable pay

and working conditions (Kreitner Kinicki amp Buelens 1999)

13

Page 22: JOB SATISFACTION TOWARDS EMPLOYEE RETENTION … Satisfaction Towards Employee... · paper is designed to understand the job satisfaction towards employee retention among ... questionnaire

skilled workers if compared with less skilled workers who work on the production

floor Therefore the turnover rate is increasing with the rise of the living cost

Engaging talented personnel is proven to be a difficult task for private employers

because heshe determines the survival and development of the company in this

competitive economic environment Each employee might have different need that

the employer should try to accommodate in order to prevent job hopping

In order words it is hard to establish staff loyalty as there are many intrinsic and

extrinsic factors that influence the individuals decision to leave a company such as

the personal factors job factors and benefits factors For instance culture

management level and the workforce environment of an organisation might be

another issue of influencing the turnover rate of a company

Lower emotional exhaustion more support from the school and higher job

satisfaction are needed to keep the music teachers in school The survey of 93 music

teachers from private music schools around Klang Valley in Malaysia indicated that

the support from the music schools high job satisfaction and low emotional

exhaustion apd pressure of teaching will likely prevent them from job hopping

(Wong amp Tay 2010)

A committed employee who has high job involvement and job satisfaction will less

likely to leave the firm The questionnaire survey conducted on 116 Information

Systems (IS) personnel working in multinational companies in Malaysia showed that

11

IS personnels job involvement and jobs satisfaction that are positively related to

organizational commitment have significant impact on their tendency to leave a job

(Teh amp Tritos 2011)

13 Research Objectives

The purposes of this study are to in context of employees working at Sibu to

examine the relationship between job satisfaction (intrinsicmotivation factors and

extrinsichygiene factors) towards employee retention Besides that the research

objective IS to investigate

(intrinsicmotivation factors and

retention

the

ext

relationship

rinsichygiene

between

factors)

job

towards

satisfaction

employee

14 Research Questions

The study is to address as the questions in context of employees working at Sibu

The first qu~stion is about What is the relationship the relationship between job

satisfaction and employee retention The second question is determined What is

the relationship between the extrinsichygiene factors and intrinsicmotivation factors

of job satisfaction and employee retention Lastly the question of What is the

most important factor in detennining the employee retention of the private sectors in

Sibu Sarawak Malaysia

12

15 Definition of Key Terms

Employee Engagement

Employee engagement- Kahn (1990) claim that utilize the commitment or

contribution of an employee self-governance by their putting their efforts skills and

knowledge towards their works physically cognitively and emotionally from the

start being employed in an organisation

Talent Turnover

Gustafson (2002) defined turnover as the ratio of the number of organizational

members who have left during the period being considered divided by the average

number of people in that organization during that period For managers it means the

entire process associated with filling a vacancy Turnover is also known as the

replacement cycle when a position is vacated each time either voluntarily or

involuntarily a new employee is hired and trained

Job Satisfaction

Job satisfaction is an attitude that individuals have about their jobs It results from

their perception of the degree to which there is good fit between the individual and

the organisation Ivancevich et aI s (1997 p 91) Job satisfaction is also described

as an emotional response towards various facets of ones job such as equitable pay

and working conditions (Kreitner Kinicki amp Buelens 1999)

13

Page 23: JOB SATISFACTION TOWARDS EMPLOYEE RETENTION … Satisfaction Towards Employee... · paper is designed to understand the job satisfaction towards employee retention among ... questionnaire

IS personnels job involvement and jobs satisfaction that are positively related to

organizational commitment have significant impact on their tendency to leave a job

(Teh amp Tritos 2011)

13 Research Objectives

The purposes of this study are to in context of employees working at Sibu to

examine the relationship between job satisfaction (intrinsicmotivation factors and

extrinsichygiene factors) towards employee retention Besides that the research

objective IS to investigate

(intrinsicmotivation factors and

retention

the

ext

relationship

rinsichygiene

between

factors)

job

towards

satisfaction

employee

14 Research Questions

The study is to address as the questions in context of employees working at Sibu

The first qu~stion is about What is the relationship the relationship between job

satisfaction and employee retention The second question is determined What is

the relationship between the extrinsichygiene factors and intrinsicmotivation factors

of job satisfaction and employee retention Lastly the question of What is the

most important factor in detennining the employee retention of the private sectors in

Sibu Sarawak Malaysia

12

15 Definition of Key Terms

Employee Engagement

Employee engagement- Kahn (1990) claim that utilize the commitment or

contribution of an employee self-governance by their putting their efforts skills and

knowledge towards their works physically cognitively and emotionally from the

start being employed in an organisation

Talent Turnover

Gustafson (2002) defined turnover as the ratio of the number of organizational

members who have left during the period being considered divided by the average

number of people in that organization during that period For managers it means the

entire process associated with filling a vacancy Turnover is also known as the

replacement cycle when a position is vacated each time either voluntarily or

involuntarily a new employee is hired and trained

Job Satisfaction

Job satisfaction is an attitude that individuals have about their jobs It results from

their perception of the degree to which there is good fit between the individual and

the organisation Ivancevich et aI s (1997 p 91) Job satisfaction is also described

as an emotional response towards various facets of ones job such as equitable pay

and working conditions (Kreitner Kinicki amp Buelens 1999)

13

Page 24: JOB SATISFACTION TOWARDS EMPLOYEE RETENTION … Satisfaction Towards Employee... · paper is designed to understand the job satisfaction towards employee retention among ... questionnaire

15 Definition of Key Terms

Employee Engagement

Employee engagement- Kahn (1990) claim that utilize the commitment or

contribution of an employee self-governance by their putting their efforts skills and

knowledge towards their works physically cognitively and emotionally from the

start being employed in an organisation

Talent Turnover

Gustafson (2002) defined turnover as the ratio of the number of organizational

members who have left during the period being considered divided by the average

number of people in that organization during that period For managers it means the

entire process associated with filling a vacancy Turnover is also known as the

replacement cycle when a position is vacated each time either voluntarily or

involuntarily a new employee is hired and trained

Job Satisfaction

Job satisfaction is an attitude that individuals have about their jobs It results from

their perception of the degree to which there is good fit between the individual and

the organisation Ivancevich et aI s (1997 p 91) Job satisfaction is also described

as an emotional response towards various facets of ones job such as equitable pay

and working conditions (Kreitner Kinicki amp Buelens 1999)

13