Benefits and motivation systems in malaysia

In Malaysia, as people know, working with the government does not guarantee will get highly paid, but still many people opt to work in the government sector. What motivates them to work with government? this phenomenon occurs because of several possibilities, it can be link to the benefits received from working in the government sector. So this research will focus on

Define the factor motivating employees choose to work with government

Determine the relationship between benefits and motivation among employees

the ranked importance of motivational factors of employees

Finding the benefits offered in government sector

Many researchers conducted studies focus on motivation and benefits, but most of the study conducted in other country and they do research on private company. Very few of them have been focused on motivation and benefits of the government sector, in general. But, this study is to reveal whether employee benefit offered by the government in Malaysia is can positively affect employee’s motivation among government servant.

1.2 Research Question/Problem Statement

Research into relationship between employee benefits and motivation and productivity is becoming more important because some researcher have examined the relationships between them ( Hong, et., 1995). Thus, the research question was proposed as:-

What is the relationship between employee benefits and motivation among Malaysian employees in government sector?

1.3 Scope of the study

This research is conducted to determine the relationship between motivation and benefit among civil servants in the state of Malacca, Malaysia. The civil servants can be defined into two main group, they are civil servants who work for Federal Government and civil servants who work for State Government. For example, civil servants who work for Federal Government are police officers, doctors from general hospitals and civil servants who work for state government are employees working at District Office.

1.4 Relevance of the study

The study will give contribution to the knowledge community in Malaysia and around the globe. This will give opportunity for them to gain some information and can later improvise and validate more on this study. This study will help university students, professors and private researchers an idea about the topic.

Besides that, because this study is focusing on civil servants in Malaysia, it will help the government of Malaysia with any information this research can provide. On the government side, they can be enlightened on motivational theory that links between the benefits provided and the employees’ motivation. Based on this information, it will help the government when making any decision on the benefits in the future.

1.5 Limitation of Study

CHAPTER 2: LITERATURE REVIEW

2.1 Malaysia Background

Malaysia is a country at east south of Asia about 329,847 square kilometres in area, which is separated by South China Sea into two regions that is peninsular Malaysia and Malaysian Borneo. Its land area is about 328,657 square kilometres and the total population of Malaysia is 25,715,819. Per capita GDP is about $14,700 with the employment rate estimated about 95 %( CIA,2010). Malaysia’s rapid economic development has been qualified to good governance and political stability, cultural values, and global economy developments (Menkoff, 1995 cited in Wirtz, 1998).

2.2 Definition of Benefits

Employee benefit is defined as any form of compensation provided by the organization other than salaries that is paid for in whole or in part the employer (Ju, Kong, Zaliha, and Kamaruzaman, 2008).

2.3 Role of Benefits

Everyone works in expectation of some reward and benefits. Malaysia Employment Act 1955 has some condition which is essential for every employer to offer some form of benefits to their employees in order to maintain competitiveness and support loyalty among employee in an organization. These mandatory benefits that required by the law become employers’ responsibility to paid for. Under Employees Provident Act, the Employee’s Provident Fund (EPF) is a compulsory for every employee and employer to contribute certain percentage of their monthly salary as an employee’s retirement benefits (myGovernment, 2010). It is also essential for the development of corporate industrial relations. For instance, retirement plan, child care, elder care, hospitalization program, social security, vacation, and paid holidays (Christoph, 1996). The fringe benefits such as subsidized meals, clothes, transport or housing also play an important role to keep employees continuing employment with the organization. The government of Malaysia also include the Social Security Organisation (SOCSO) which is an insurance scheme to help and provide protection to employees and their families in the occurrence of accidents consequential in disablement, death, or problem with working disease. Another benefit that civil servants can enjoy is medical, housing, education, and leave benefits (myGovernment, 2010).

2.4 Motivation Defined

Motivation has been defined as the psychological process that gives behaviour purpose and direction (Kreitner, 1995); tendency to behave in a purposive manner to accomplish specific, unmet needs ( Buford, Bedeian,& Linder, 1995); an internal drive to satisfy an unsatisfied need ( Higgins, 1994); and the will to achieve (Bedeian, 1993); in my perspective and for this research, motivation is the reasons why someone wants to do something and individual inner force to achieve personal and organizational goals.

2.5 Role of Motivation

The importance of analyzing and enhancing the level of job satisfaction and motivation among employees, was highlighted by a report in the New Straits Times (9 April 2005, p.10). Motivation is more than a tool that managers can use to encourage employee loyalty and improve productivity, but also as a survival (Smith, 1994).Motivated employees help organization to survive because employees are more produce. Managers and team leaders have a liability for motivation in the workplace in order to get things done through employee. Motivating employees to increase satisfaction and productivity is an important concern for organization seeking to remain competitive in the global marketplace. Well motivated employees will work so much better and are so much productivity and creative because they work with interest and enthusiasm, while de motivated employees will be less productive, result in high absenteeism and also employee turnover (Sarker, 2003). Motivation can be intrinsic and extrinsic. Intrinsic or internal motivation is activated from the inside where “is valued for its own sake and appears to be self sustained” (Calder and Staw, 1975; Deci 1975; Deci and Ryan, 1980). Intrinsic motivation can be directed to the activity’s flow (Csikszentmihalyi, 1957), to a self-defined goal such as climbing a mountain (Loewenstein, 1999) or the obligations of personal and social identities (March, 1999). While extrinsic or external is activated from the outside most importantly through monetary compensation. So that, benefits is one of the extrinsic motivations.

2.6 Frederick Herzberg

Based on Frederick Herzberg’s two-factor theory, where also known as the motivator-hygiene theory, there are two different factors affecting job satisfaction and job dissatisfaction.

First, hygiene factor or extrinsic factor, according to Herzberg, cannot motivate employee but can minimize dissatisfaction if it is handle properly. A hygiene factor includes working conditions, company policies, supervision, salary, and incentive pay. If one or more of the factors are not fulfil, it can lead to employee’s dissatisfaction. The hygiene factor will affect employees’ work motivation and thus productivity( Hong, Yang, Wang, Chiou, Sun, and Huang, 1995) That is why the employees benefits must be emphasize and become key element in order to maintain or increase employee’s motivation

Another factor is motivator or intrinsic, says Herzberg, the job content is sources of satisfaction. A motivation factor includes achievement, recognition, work itself, responsibility, advancement, and growth. If any one of the factors fulfil, it will lead to satisfaction and encourage production. In order to create self-motivated workforce, company should highlight all these elements and to make the jobs are more challenging, managers can make the job intrinsically motivating by providing feedback and recognition. It follows that “if you want people motivated to do a good job, give them a good job to do” (Herzberg, as quoted by Kohn, 1993).

2.7 Classical theory of motivation

Frederick W. Taylor studies on how employee performs their task in an effort to improve the employees’ activity. According to this theory, money is the sole motivator to the employees. Taylor suggests that the more paid the employee received, the more productivity will produce. Furnham (1994) claimed that money could influence the employees’ motivation and also act as an incentive for employees to loyal and remain within the organization longer. He also believes that incentive would motivate employee to be more productive. Due to this, it is vital for organization to take care of their employee’s income and welfare. Incentive can be financial which it some form of payment and cash transfer, and some of it is direct such as salary, pension, insurance, bonuses and so on and also can be indirect like subsidized meals, clothes, or housing. Incentive can be also non financial, for example, gift, rewards, travel and so on (UNDP, 2006).

Currently, travel incentive is a well known application in the organization milieu (Kimberly, Shiela, 1995). Rubin (1986) stated that since travel incentive introduced, it has been the most effective motivators other than cash benefits. According to Nuelle, the benefits afforded by an incentive trip cannot be underestimated; the travel reward has ‘trophy value’ which insinuates that the reward provides a long-lasting, positive reinforcement, an element that adds to motivational value (Hastings, B, Kiely, J, and Watkins, 1988).

2.8 Victor Vroom

Vroom’s theory is based on the belief that employee effort will lead to performance and performance will lead to rewards (Vroom, 1964). Rewards may be either positive or negative. The more positive the reward the more likely the employee will be highly motivated. Conversely, the more negative the reward the less likely the employee will be motivated

The expectancy theory of Victor Vroom describe employee in an organization will enthused when they believe that:-

Putting more work effort give in by better job performance.

Successful performance will be rewarded.

The reward itself must be of value to employees

In Vroom’s theory, motivation is upon the following three criteria. Motivation= (E *I*V) where E represent expectancy, I instrumentality, and V valence. So, Vroom in his expectancy theory say that people work in expectation of some rewards in order to build quality and quantity of work, and in turn productivity. All business use pay, promotion, bonuses, and other type of reward to encourage and enhance employee’s interest and performance (Cameron and Pierce, 1977). As stated by Lawler and Porter, ‘good performance may lead to rewards, which in turn higher performance and motivation’. So, the employee will feel appreciated for their hard work and sacrifice when they received the rewards and they are positive and motivated to continue to excel (Gunsch, 1991).

2.9 Adam’s Equity Theory

Adams’ theory states that employees strive for equity between themselves and other workers. Equity is achieved when the ratio of employee outcomes over inputs is equal to other employee outcomes over inputs (Adams, 1965). When individual feels unfairly treated or felt inequity is negative, employees become demotivated and may decide to work less hard in the future or to quit a job for another more attractive opportunity. Research on equity theory indicates that employees who feel overpaid are likely to increase their quantity and quality of their work, whereas those who feels underpaid are likely to decrease of their quantity and quality of their work (Adams, 1965).

3.0 Skinner’s Reinforcement Theory

Skinner’s theory states those employees’ behaviors that lead to positive outcomes will be repeated and behaviours that lead to negative outcomes will not be repeated (Skinner, 1953).

3.1 Maslow

According to Maslow’s hierarchy theory, the employee benefit programmes could be categorized into four types of welfare demands which are physical demands, security demands, social demands, and self-actualization demands. Maslow argued that lower level needs had to be satisfied before the next higher level need would motivate employees.

First, physical demands benefits includes loan, dividend, year-end bonuses, saving subsidies, emergency and meal subsidies, individual annual vacation, national holidays, paid leaves, and housing benefits. Next, security demands benefits which include medical insurance, pension day-care service, life and occupational disease compensation, medical equipment and subsidies. Third, social-demand benefits include travel incentive, Parental leave (maternity and paternity leave). Finally, self-actualization demand (including self-esteem) benefit includes opportunities and subsidies for further education or training and flexible working time.

CHAPTER 3: RESEARCH METHODOLOGY

This study targets on Government sector employees and analyzes the relationship between benefits and motivation among them. In this study, a total of 300 questionnaires will be distribute and collect randomly where the respondents targeted male or female employees who working with Federal Government and civil servants who work for State Government around Malacca.

The questionnaires will be divided into five parts as a major measurement instrument of this study and each part include 5 questions. This questionnaire use a likert scale that range from 1 being strongly disagree to 4 being strongly agree. The first part is demographic questions, the second part is physical demand, the third part is security demand, the fifth part is social demand, and the last part is self- actualization demand.

3.1 Theoretical Framework

Physical Demand

Security Demand

Motivation

Social Demand

Self-actualization Demand

So, there are four independence variables that influence in employees’ motivation which is a dependent variable for this research: physical demand, security demand, social demand, and self-actualization (including self-esteem).

3.2 Hypothesis

The research hypothesizes the following hypotheses:

H1: The physical demand benefits positively influence motivation.

H2: The Security Demand benefits positively influence motivation.

H3: The Social Demand benefits positively influence motivation.

H4: The Self-actualization benefits positively influence motivation.