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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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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